area handbook series 

Nepal and Bhutan 

country studies 




7 



o 



Nepal and Bhutan 

country studies 

Federal Research Division 
Library of Congress 
Edited by 
Andrea Matles Savada 
Research Completed 
September 1991 



On the cover: Mountains and monasteries are typical of both 
Nepal and Bhutan. 



Third Edition, First Printing, 1993. 

Library of Congress Cataloging-in-Publication Data 

Nepal and Bhutan : country studies / Federal Research Division, Library 
of Congress ; edited by Andrea Matles Savada. — 3rd ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA pam ; 550-35) 

"Supersedes the 1973 edition of Area handbook for Nepal, 
Bhutan, and Sikkim written by George L. Harris, et al." — T.p. 
verso. 

"Research completed September 1991." 

Includes bibliographical references (pp. 369-393) and index. 

ISBN 0-8444-0777-1 

1. Nepal. 2. Bhutan. I. Savada, Andrea Matles, 1950- . II. 
Library of Congress. Federal Research Division. III. Area hand- 
book for Nepal and Bhutan. IV. Series. V. Series: DA pam ; 



550-35. 
DS491.4.N46 1993 
954.96— dc20 



93-12226 
CIP 



Headquarters, Department of the Army 



DA Pam 550-35 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C 20402 



Foreword 



This volume is one in a continuing series of books prepared by 
the Federal Research Division of the Library of Congress under 
the Country Studies/ Area Handbook Program sponsored by the 
Department of the Army. The last page of this book lists the other 
published studies. 

Most books in the series deal with a particular foreign country, 
describing and analyzing its political, economic, social, and national 
security systems and institutions, and examining the interrelation- 
ships of those systems and the ways they are shaped by cultural 
factors. Each study is written by a multidisciplinary team of social 
scientists. The authors seek to provide a basic understanding of 
the observed society, striving for a dynamic rather than a static 
portrayal. Particular attention is devoted to the people who make 
up the society, their origins, dominant beliefs and values, their com- 
mon interests and the issues on which they are divided, the nature 
and extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should not 
be construed as an expression of an official United States govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Corrections, 
additions, and suggestions for changes from readers will be wel- 
comed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, D.C. 20540 



iii 



Acknowledgments 



The authors wish to thank the various individuals and organi- 
zations that provided assistance in the preparation of this book. 
Allen W. Thrasher, Asian Division, and Lygia M. Ballantyne and 
the staff of the New Delhi Field Office of the Library of Congress 
provided useful and timely research materials from Bhutan. Karl 
Ryavec of the Defense Mapping Agency verified hard-to-locate 
Nepalese and Bhutanese place-names and spellings. Staff of the 
Royal Nepalese Embassy in Washington provided photographs, 
statistical data, and the clarification of information. Staff of the 
Permanent Mission to the United Nations of the Kingdom of Bhu- 
tan kindly provided maps, photographs, and documentary infor- 
mation on Bhutan. 

Special thanks goes to Brian C. Shaw for lending his expertise 
on Nepal and Bhutan in serving as reader of the completed 
manuscript. Additionally, Thierry Mathou, a member of the staff 
of the Embassy of France in Washington, who is preparing his own 
manuscript on Bhutan, reviewed the Bhutan text and provided help- 
ful research materials and insights. Gopal Siwkoti, then an attor- 
ney with the Washington-based International Human Rights Law 
Group, also provided materials and shared his insights on the de- 
velopment of Nepalese politics during the prodemocracy movement. 
Tshering Dorji, director of the Department of Telecommunications 
of the Kingdom of Bhutan, graciously allowed the author of the 
Bhutan chapter to interview him when he visited the Library of 
Congress and reviewed and suggested corrections to the section 
on Bhutan's telecommunications. Thanks are also due Ralph K. 
Benesch, who oversees the Country Studies/Area Handbook Pro- 
gram for the Department of the Army. 

Thanks also go to staff members of the Federal Research Divi- 
sion of the Library of Congress who directly assisted with the book. 
Sandra W. Meditz reviewed the entire manuscript and made use- 
ful suggestions; David P. Cabitto prepared the layout and graph- 
ics; Marilyn Majeska supervised editing and managed production; 
Andrea Merrill provided invaluable assistance in preparing the ta- 
bles; Timothy L. Merrill reviewed the maps and geography and 
telecommunications sections; Ly Burnham reviewed sections on 
demography; Alberta J. King provided secondary- source research 
assistance in the preparation of Chapter 6 and bibliographic as- 
sistance for other chapters; and Izella Watson and Barbara Edg- 
erton performed word processing. 



v 



The following individuals are gratefully acknowledged as well: 
Harriett R. Blood for preparing the topography and drainage maps; 
Barbara Harrison and Beverly J . Wolpert for editing the body of 
the book; Catherine Schwartzstein for prepublication editorial 
review; Joan C. Cook for preparing the index; Joyce L. Rahim 
for word-processing support; and Malinda B. Neale and Linda 
Peterson of the Printing and Processing Section, Library of Con- 
gress, for phototypesetting, under the direction of Peggy Pixley. 

Finally, the authors acknowledge the generosity of the individuals 
and the public and private agencies who allowed their photographs 
to be used in this study. 



vi 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xiii 

Introduction , XV 

Table A. Nepal: Chronology of Important 

Events xxix 

Nepal: Country Profile xxxiii 

Chapter 1. Nepal: Historical Setting 1 

James Heitzman 

ANCIENT NEPAL, ca. 500 B.C.-A.D. 700 4 

Early Influences on Nepal 4 

The Early Kingdom of the Licchavis, 400-750 6 

MEDIEVAL NEPAL, 750-1750 9 

Transition to the Medieval Kingdom, 750-1000 9 

The Malla Kings 10 

The Three Kingdoms 12 

THE MAKING OF MODERN NEPAL 15 

The Expansion of Gorkha 15 

The Struggle for Power at Court 18 

The Enclosing of Nepal 20 

Infighting among Aristocratic Factions 23 

RANA RULE 26 

The Kot Massacre 26 

The Dictatorship of Jang Bahadur 27 

The Rana Oligarchy 32 

The Growth of Political Parties 36 

The Return of the King 38 

The Democratic Experiment 41 

The Panchayat System under King Mahendra 44 

Modernization under King Birendra 48 

Chapter 2. Nepal: The Society and Its 

Environment 53 

Nanda R. Shrestha 

GEOGRAPHY 56 

The Land 56 



vii 



Climate 60 

The River System 62 

POPULATION 65 

Population Structure and Settlement Patterns 65 

Urbanization 67 

Migration 69 

Population Planning 72 

Caste and Ethnicity 74 

SOCIAL SYSTEM AND VALUES 81 

Rural Society and Kinship 83 

Women's Status and Role in Society 86 

Social Classes and Stratification 87 

RELIGION 88 

Religion and Society 88 

Hinduism 90 

Buddhism 91 

EDUCATION 92 

Education under Rana Rule 92 

Education since 1951 94 

HEALTH 98 

Diseases and Disease Control 98 

Health-Care Facilities 100 

Chapter 3. Nepal: The Economy 105 

Vishwa S. Shukla 

ECONOMIC SETTING 107 

ROLE OF GOVERNMENT 108 

The Five- Year Plans 108 

Other Development Programs 112 

BUDGETING PROCESS 113 

Regular and Development Budget 113 

Taxation 113 

MONEY AND BANKING 114 

FOREIGN TRADE 116 

BALANCE OF PAYMENTS 118 

FOREIGN AID 119 

LABOR 121 

AGRICULTURE 122 

LAND REFORM 124 

FORESTS 125 

INDUSTRY 126 

Manufacturing 127 

Private Industry 127 



Vlll 



Public Companies 128 

Minerals 128 

ENERGY 129 

TRANSPORTATION 133 

Roads 133 

Railroads 135 

Ropeways 136 

Civil Aviation 136 

Other Modes of Transportation 137 

COMMUNICATIONS 137 

TOURISM 138 

PROBLEMS AND PROSPECTS 139 

Chapter 4. Nepal: Government and Politics .... 143 

Enayetur Rahim 

CONSTITUTIONAL DEVELOPMENT 146 

The Rana System 146 

The Interim Constitution, 1951 147 

The Royal Constitution of 1959 148 

The Panchayat Constitution, 1962 149 

Constitutional Amendments 150 

The Referendum of 1980 150 

The Constitution of 1990 152 

Other Features of the Constitution 154 

The Executive 154 

The Legislature 155 

The Judiciary 157 

The Civil Service 159 

The Administrative System 159 

POLITICAL DYNAMICS 161 

The Panchayat System 161 

Political Parties 166 

Elections 171 

THE MEDIA 176 

FOREIGN POLICY 179 

Relations with India 180 

Relations with Other South Asian Nations 183 

Relations with China 184 

Relations with the United States 187 

Relations with Britain 189 

Relations with the Soviet Union 189 

Relations with Other Countries 190 

International and Regional Organizations 190 



IX 



Chapter 5. Nepal: National Security 195 

Douglas C. Makeig 

ARMED FORCES AND SOCIETY 198 

Origins of the Legendary Gurkha 198 

From the Anglo-Nepalese War to World War II .... 200 

Arrangements after World War II 203 

Legal Basis under the 1990 Constitution 205 

ORGANIZATION OF THE ARMED FORCES 208 

Defense Spending 209 

Missions 211 

Force Dispositions and Capabilities 214 

Recruitment, Training, and Morale 216 

Rank Structure and Insignia 221 

Gurkhas Serving Abroad 223 

MILITARY JUSTICE 225 

THE POLICE SYSTEM 226 

THE JUDICIAL SYSTEM 228 

The Legal Code 228 

The Court System 229 

THE SECURITY ENVIRONMENT 231 

India 232 

China 236 

Internal Security Considerations 237 

THE MILITARY IN THE EARLY 1990s 239 

Table B. Bhutan: Chronology of Important 

Events 241 

Bhutan: Country Profile 245 

Chapter 6. Bhutan 251 

Robert L. Worden 

HISTORICAL SETTING 253 

Origins and Early Settlement, A.D. 600-1600 253 

Theocratic Government, 1616-1907 256 

Establishment of the Hereditary Monarchy, 1907 .... 261 

Development of Centralized Government, 1926-52 . . . 263 

Modernization under Jigme Dorji, 1952-72 263 

Entering the Outside World, 1972-86 266 

THE SOCIETY AND ITS ENVIRONMENT 266 

Geography 266 

Population 272 

Social System 276 

Religious Tradition 281 



x 



Education 284 

Health 287 

THE ECONOMY 289 

The Economic Context 289 

Role of the Government 290 

Foreign Economic Relations 295 

Agriculture 298 

Forestry 301 

Industry, Mining, Energy, and Commerce 303 

Labor Force 306 

Transportation and Communications 306 

Tourism 312 

GOVERNMENT AND POLITICS 313 

The Monarchy 313 

Structure of the Government 315 

Political Developments 323 

The Media 328 

Foreign Relations 328 

NATIONAL SECURITY 335 

Strategic Location 335 

Armed Forces 336 

Paramilitary 339 

Police Force 340 

Legal System 341 

Appendix. Tables 345 

Bibliography 369 

Glossary 395 

Index 401 

List of Figures 

1 Nepal: Zonal Administrative Divisions, 1991 xxxii 

2 Nepal and Bhutan, 1991 16 

3 Nepal, 1815 24 

4 Nepal: Geographic Regions 58 

5 Nepal: Topography and Drainage 64 

6 Nepal: Population Distribution by Age and Sex, 1988 .... 68 

7 Nepal: Distribution of Principal Ethnic Groups, 1990 .... 78 

8 Nepal: Shares of Gross Domestic Product, 1989 126 

9 Nepal: Transportation System, 1991 134 

10 Nepal: Structure of the Government, 1991 156 

11 Nepal: Organization of the Armed Forces, 1991 210 



xi 



12 Nepal: Military Ranks and Insignia, 1991 222 

13 Bhutan: Administrative Divisions, 1991 244 

14 Bhutan: Topography and Drainage 268 

15 Bhutan: Population Distribution by Age 

and Sex, 1988 274 

16 Bhutan: Transportation System, 1988 310 

17 Bhutan: Structure of the Government, 1991 320 



xii 



Preface 



This is the first edition of Nepal and Bhutan: Country Studies. It 
supersedes the 1973 Area Handbook for Nepal, Bhutan, and Sikkim. 
The material on Nepal is presented in the standard five-chapter 
format of the country study series. A sixth chapter, on Bhutan, 
covers the subjects addressed in the five Nepal chapters, but in a 
single chapter. The material on Sikkim has been dropped; readers 
should consult India: A Country Study for information on Sikkim. 

Nepal and Bhutan: Country Studies is an effort to present an objec- 
tive and concise account of the social, economic, political, and na- 
tional security concerns of contemporary Nepal and Bhutan within 
historical frameworks. A variety of scholarly monographs and jour- 
nals, official reports of government and international organizations, 
and foreign and domestic newspapers and periodicals were used 
as sources. Brief commentary on some of the more useful and readily 
accessible sources appears at the end of each chapter. Full refer- 
ences to these and other sources appear in the Bibliography. The 
annual editions of the Bibliography of Asian Studies will provide the 
reader with additional materials on Nepal and Bhutan. 

The authors have limited the use of foreign and technical terms, 
which are defined when they first appear. Readers are also referred 
to the Glossary at the back of the volume. Spellings of contem- 
porary place-names generally are those approved by the United 
States Board on Geographic Names. All measurements are given 
in the metric system. A conversion table is provided for those readers 
who may not be familiar with metric equivalents (see table 1 , Ap- 
pendix). 

The body of the text reflects information available as of Septem- 
ber 1991. Certain other portions of the text, however, have been 
updated. The Introduction discusses significant events that have 
occurred since the completion of research, the Country Profile in- 
cludes updated information as available, and the Bibliography in- 
cludes recendy published sources thought to be particularly helpful 
to the reader. 



xiii 



Introduction 



THE HIMALAYAN KINGDOMS of Nepal and Bhutan share 
a history of influence by Tibet, China, and India, and an inter- 
lude of British colonial guidance. Although the kingdoms are not 
contiguous, each country is bordered by China to the north and 
India on its other peripheries. Both kingdoms are ruled by heredi- 
tary monarchs and are traditional societies with predominantly 
agricultural economies; their cultures, however, differ. Nepal's Hin- 
duism, a legacy of India's influence, defines its culture and caste- 
structured society. Bhutan's Buddhist practices and culture reflect 
India's influence by way of Tibet. The two countries' legal sys- 
tems also reflect their heritage. Nepal's judicial system blends Hindu 
legal and English common law traditions. Bhutan's legal system 
is based on Buddhist law and English common law. 

Nepal has existed as a kingdom centered in the Kathmandu Val- 
ley for more than 1,500 years (see fig. 1). The country is known 
for its majestic Himalayas and has nine of the fourteen peaks in 
the world over 8,000 meters, including Mount Everest and An- 
napurna I. 

Modern Nepal began its evolution in the sixteenth century with 
the founding of the House of Gorkha by Dravya Shah in 1559. 
In the late eighteenth century, Gorkha conquests extended the king- 
dom through the Himalayas for almost 1 ,500 kilometers from the 
western boundary of Garhwal, India, through the territory of Sik- 
kim in the east. In the early nineteenth century, Gorkha power 
came into conflict with the British East India Company. The result- 
ing Anglo-Nepalese War (1814-16) was devastating for Nepal: the 
Treaty of Sagauli reduced the kingdom to the boundaries it has 
since occupied, less than 900 kilometers from east to west. For 
almost thirty years after the treaty was concluded, infighting among 
aristocratic factions characterized Nepal. 

The next stage of Nepalese politics was the period of hereditary 
Rana rule — the establishment of a dictatorship of successive Rana 
prime ministers beginning with Jang Bahadur Kunwar in 1846. 
During the period of Rana rule, which lasted until the end of 1950, 
Nepal was governed by a landed aristocracy; parliamentary govern- 
ment was in name only. This period provided stability, but also 
inhibited political and economic development because the Ranas 
isolated the country and exercised total control over internal affairs. 
Although during this period Nepal was a constitutional monarchy 
with universal suffrage granted at age eighteen, political parties 



xv 



were not formed until the mid-twentieth century and were later 
banned. The longevity of the Rana dictatorship was also a result 
of a partnership between the rulers and the army. Patronage en- 
sured loyal soldiers: the military supported the Rana prime ministers 
and, later, the Shah monarchs, who were figureheads during Rana 
rule. 

In January 1951 , the Ranas were forced to concede to the resto- 
ration of the monarchy, which then assumed charge of all execu- 
tive powers: financial management, appointment of government 
officials, and command of the armed forces. The latter power be- 
came an increasingly useful tool for enforcing control. In 1962 King 
Mahendra Bir Bikram Shah Dev devised the centrally controlled 
partyless council system of government called panchayat (see Glos- 
sary). This system served as the institutional basis of the king's 
rule and was envisioned by the palace as a democratic administra- 
tion although it functioned only at the king's behest. Incorporated 
into the 1962 constitution, the panchayat system was established at 
the village, district, and national levels. Successive changes in 
government and constitutional revisions did not weaken the pow- 
ers of the absolute monarchy. In fact, a May 1980 referendum 
reaffirmed the status quo of the panchayat system and its continua- 
tion as a rubber stamp for the king. Elections in 1981 and 1986 
were characterized by the lack of political programs. 

Government by an absolute monarch behind a democratic fa- 
cade lasted for some thirty years. Although many party members 
were exiled to India, opposition to the government and the pan- 
chayat system continued to grow, particularly in the late 1980s when 
the outlawed political parties announced a drive for a multiparty 
system. A coalition between the Nepali Congress Party and the 
Communist Party of Nepal was formed in late 1989. The increas- 
ing disillusionment with and unpopularity of King Birendra Bir 
Bikram Shah Dev's regime and the worsening economic situation 
caused by the trade and transit dispute with India added to the 
momentum of the incipient prodemocracy movement. 

The dissolution of the Berlin Wall and the Soviet Union, and 
the successes of the prodemocracy movements in Eastern Europe 
in the late 1980s and early 1990s, had an impact in Nepal. In part 
as a result of the participatory experiences of Nepalese in India, 
movements arose to effect changes in Nepal's government and 
society. Nepal's longstanding history of continuity of rule and rela- 
tive stability was challenged when the Movement for the Restora- 
tion of Democracy, or prodemocracy movement, was formally 
established on February 18, 1990, almost forty years after the end 
of Rana control. Demonstrations and rallies — accompanied by 

xvi 



violence, arrests, and even deaths — were held throughout the coun- 
try. Political unrest became widespread. Ethnic groups agitated 
for official recognition of their cultural heritage and linguistic tra- 
dition and demonstrated against the monarchy. The goal of the 
prodemocracy movement, however, was to establish a more 
representative democracy and to end the panchayat system. 

The demonstrations and protests characterizing the prodemocracy 
movement gained momentum when the ban on political parties and 
activities was lifted in April 1990. That same month, the prime 
minister resigned, the Council of Ministers and the Rashtriya Pan- 
chayat (National Panchayat, or Parliament) were dissolved, and 
talks with the opposition were begun. A multiparty interim gov- 
ernment replaced the panchayat system. The king nominated a 
four-member council, established a Constitution Recommendation 
Commission, and announced that he would begin an official in- 
quiry into the deaths that had resulted from the prodemocracy 
demonstrations. In mid-May, a general amnesty was declared for 
all political prisoners. A draft constitution was announced in the 
summer of 1990. King Birendra wanted the draft amended to give 
him more leverage, but subsequent negotiations did not yield as 
much as he desired. In November 1990, the king finally approved 
and promulgated a new, more democratic constitution that vested 
sovereignty in the people. 

The panchayat system finally ended in May 1991, when general 
elections, deemed "generally fair, free, and open" by an interna- 
tional election inspection team, were held. Approximately 65 per- 
cent of the populace voted. Although more than forty political 
parties registered with the election commission, only twenty polit- 
ical parties — mostly small, communist splinter groups — were on 
the ballot. The Nepali Congress Party won 110 of the 205 seats 
in the House of Representatives, and the Communist Party of Nepal 
(United Marxist-Leninist) won 69 seats. Previously operating in 
exile and behind the scenes, the various communist and other parties 
and coalitions became a powerful presence in the newly constitut- 
ed bicameral Parliament. Nepal continued its gradual move toward 
a multiparty democracy. 

Prodemocracy protests continued unabated. Demonstrations 
were held on February 18, 1992, the second anniversary of the 
founding of the prodemocracy movement. In early April 1992, rival 
student groups clashed, and communist and leftist opposition groups 
called for a general strike as a response to double-digit inflation 
and a more than 60 percent increase in water and electricity rates. 
As a result of skirmishes between the police and demonstrators, 
a curfew was imposed. In addition, the government banned primary 



xvii 



and secondary schoolteachers from political activities and from join- 
ing or campaigning for political parties. 

Elections to the village development committees and municipal- 
ities were held in late May 1992; the elections pitted the various 
communist factions and other parties against the Nepali Congress 
Party administration of Prime Minister Girija Prasad (G.P.) Koirala. 
More than 90,000 civilian and security personnel were assigned 
to safeguard the elections. In contrast to the May 1991 parliamen- 
tary election, the Nepali Congress Party routed the communists 
in the urban areas and even made some gains in the rural areas. 
The Nepali Congress Party won 331 positions, or 56 percent of 
the seats, in the municipalities; the Communist Party of Nepal 
(United Marxist- Leninist) won 119 seats, or 20 percent of the seats; 
and other lesser parties won the remainder of the seats. In newly 
established village development committees, the Nepali Congress 
Party won 21 ,461 positions; the Communist Party of Nepal (United 
Marxist- Leninist) won 11,175 seats. 

The Nepalese army has long been intertwined with the monar- 
chy; the 1990 constitution, however, changed the relationship be- 
tween the military and the king. For the first time, the military 
no longer was solely an instrument of the king; it was also subor- 
dinate to the authority of Parliament. Although under the consti- 
tution the king retains his title as the supreme commander of the 
army, the functional commander in chief is appointed on the recom- 
mendation of the prime minister. Although both the king and the 
government are responsible for implementing national security and 
military policy, the king's power to declare a state of national emer- 
gency and to conduct foreign affairs has national security impli- 
cations. 

Nepal is noted for its famed Gurkha soldiers. Gurkhas served 
both at home and abroad in the British, Indian, Singapore, and 
Brunei armies. Their remittances to Nepal were of primary im- 
portance to the economy and served as an important source of for- 
eign exchange. By 1997, however, the number of Gurkhas serving 
in the British army is expected to be reduced from 8,000 to 2,500 
persons, and the Gurkha garrison in Hong Kong is scheduled to 
be withdrawn gradually in the period up to 1995. As of April 1992, 
a token number of Gurkhas were serving in a United Nations 
peacekeeping force in the former Yugoslavia. 

The difficulty of replacing Nepal's long tradition of autocracy 
with a democracy, coupled with the economic challenges posed by 
physical geography and location, was daunting. As of 1992, many 
of the prescribed changes had only just been instituted, or were 
still to come. Many observers expected that the populist experiment 



xvin 



of a multiparty democracy would meet with eventual failure and 
that the monarchy and the army would return to some type of 
power- sharing formula. 

Nepal's population, estimated in 1990 as approximately 19.1 mil- 
lion, is very diverse. The country is home to more than a dozen 
ethnic groups, which originate from three major ethnic divisions: 
Indo-Nepalese, Tibeto-Nepalese, and indigenous Nepalese. Eth- 
nic identity — distinguished primarily by language and dress — 
constrains the selection of a spouse, friendships, and career, and 
is evident in social organization, occupation, and religious obser- 
vances. Hinduism is the official religion of Nepal, although, in fact, 
the religion practiced by the majority of Nepalese is a synthesis 
of Hinduism and Buddhism and the practices have intermingled 
over time. The socioeconomic ramifications of the country's diver- 
sity have proven problematic for Nepal in the late twentieth century. 

Considered a least-developed country, Nepal depends heavily 
on farming, which accounts for most of the country's gross domestic 
product. The work force is largely unskilled and mostly illiterate. 
Nepal's industrial base was established in the 1930s, but little 
progress has been made in improving economic performance. In 
the early 1990s, tourism was one of the largest sources of foreign 
exchange; visitors from the United States were the most numerous. 

Social status in Nepal is measured by economic standing. Land- 
ownership is both a measure of status and a source of income. Wom- 
en occupy a secondary position, particularly in business and the 
civil service, although the constitution guarantees equality between 
men and women. Nepalese tribal and communal customs dictate 
women's lesser role in society, but their status differs from one ethnic 
group to another and is usually determined by caste. 

As of 1992, education was free and compulsory for five years; 
however males had literacy rates about three times higher than the 
rates for females and higher school enrollment levels. There were 
relatively few other social services in the country. The absence of 
modern medical care, clean drinking water, and adequate sanita- 
tion resulted in the prevalence of gastrointestinal diseases. Mal- 
nutrition was also a problem, particularly in rural areas. A period 
of drought in 1992 was expected to cause further food shortages, 
especially of grain. The country has consistently had high mor- 
bidity and death rates. 

Economic assistance from other countries, especially India, has 
been vital to Nepal. Since the 1980s, however, bilateral aid and 
multilateral assistance programs from countries other than India 
have been an increasingly important part of development planning. 



xix 



Nepal has received aid from both the United States and communist 
countries. 

In the late twentieth century, Nepal's foreign policy continued 
to be affected by its geostrategic location between China and In- 
dia and its attempt to maintain a balance between these powerful 
neighbors. Nepal's relationship with India is governed by the 1950 
Treaty of Peace and Friendship and its accompanying letters, which 
established an informal military alliance whereby both countries 
are required to consult and "devise effective countermeasures" in 
case the security of either is threatened. Since the 1970s, however, 
Nepal has exhibited greater independence in its foreign policy, es- 
tablishing bilateral diplomatic relations with other countries and 
joining various multilateral and regional organizations. 

Nepal, for example, belongs to the United Nations and its af- 
filiated agencies such as the Group of 77, as well as the Nonaligned 
Movement and the Asian Development Bank. It is also a member 
of the South Asian Association for Regional Cooperation (SAARC), 
founded in 1983, initially under a slightly different name, as an 
institutionalized framework for regional cooperation; its perma- 
nent secretariat was established in 1987 in Kathmandu. Nepal does 
not accept compulsory United Nations International Court of 
Justice jurisdiction. 

One of India's longstanding sources of power over Nepal has 
been India's control of access to raw materials and supply routes. 
The effect of this control was especially evident during the 1989 
trade and transit dispute — and its aftermath — when the foreign 
trade balance was negatively affected and the economy took a 
downturn. 

In early 1992, Nepal's relations with India were clouded by con- 
troversy over the December 1991 agreement for cooperation on 
a hydroelectric and irrigation project at Tanakpur, near the south- 
western Nepalese-Indian border. The Communist Party of Nepal 
(United Marxist-Leninist) and other leftist parties opposed the 
project, which they regarded as against Nepal's national interest 
because the site, on Nepalese territory, was not covered by a for- 
mal treaty. The constitution stipulates that treaties need parliamen- 
tary assent if exploitation of the nation's natural resources is 
involved. Prime Minister G.P. Koirala said he had signed a 
memorandum of understanding, not a treaty. The opposition took 
its case to the Supreme Court. 

Military relations between Kathmandu and New Delhi were cor- 
dial. In March 1992, the Indian chief of army staff visited Nepal 
and was made an honorary general of the Royal Nepal Army, an 
uncommon occurrence. 



xx 



Nepal's relations with China were low-key and an exercise in 
caution. Nonetheless, India interpreted sales of air defense weapons 
by China to Nepal in 1988 as interfering with its treaty arrange- 
ments with Nepal. Nepal and China, however, signed technical 
and economic cooperation agreements in March 1992. 

Bhutan has its own distinct history, although it shares Nepal's 
Himalayan geography and neighbors (see fig. 2). Only one-third 
the size of Nepal, Bhutan also has a much smaller population: es- 
timated at about 600,000 persons in 1990 as compared to a popu- 
lation of over 19 million in Nepal. 

The precursor of Bhutan, the state of Lhomon or Monyul, was 
said to have existed between 500 B.C. and A.D. 600. At the end 
of that period, Buddhism was introduced into the country; a branch 
of Mahayana Buddhism is the state religion of Bhutan. Bhutan 
was subject to both Indian and Tibetan influences, and small in- 
dependent monarchies began to develop in the country by the early 
ninth century. Religious rivalry among various Buddhist subsects 
also influenced political development; the rivalry began in the tenth 
century and continued through the seventeenth century, when a 
theocratic government independent of Tibetan political influence 
united the country. From that time until 1907, the Kingdom of 
Bhutan, or Drukyul (literally land of the Thunder Dragon), had 
a dual system of shared civil and spiritual (Buddhist) rule. In 1907 
the absolute monarchy was established, and the hereditary posi- 
tion of Druk Gyalpo, or Dragon King, was awarded to the power- 
ful Wangchuck family. Since 1972, Jigme Singye Wangchuck has 
held the position of Druk Gyalpo. 

The Druk Gyalpo controls the executive, legislative, and judi- 
cial branches of the government. The monarchy is absolute, but 
the king is admired and respected and is referred to by the people 
as "our King." The Council of Ministers and Royal Advisory 
Council are part of the executive branch of government. The legis- 
lative branch is made up of the unicameral National Assembly, 
or Tshogdu, whose members are either indirectly elected or ap- 
pointed by the Druk Gyalpo. Bhutan has neither a written consti- 
tution nor organic laws. The 1953 royal decree on the Constitution 
of the National Assembly is the primary legal, or constitutional, 
basis for that body and sets forth its rules and procedures. The 
Supreme Court of Appeal, in effect the Druk Gyalpo, is the highest 
level court; judges are appointed by the Druk Gyalpo. There are 
no lawyers. The civil code and criminal code are based on 
seventeenth-century concepts. 

Under Jigme Singye Wangchuck, Bhutan's centrally controlled 
government system has been instrumental in initiating greater 



xxi 



political participation. In the early 1990s, however, there were still 
no legal political parties — although there were elite political 
factions — and no national elections. There was no overt communist 
presence. Each family was allowed one vote in village-level elec- 
tions. Local government was divided into zones, districts, subdis- 
tricts, and village groups, and meetings were regularly held at the 
village and block (gewog) levels, where issues were decided by public 
debate. The complex administrative network of consultation and 
decisionmaking by consensus obscured the need for national elec- 
tions. At the 1992 session of the National Assembly, support for 
the hereditary monarchy was unanimously reaffirmed. 

Like Nepal, Bhutan has a diverse population. It is home to four 
ethnic groups: Ngalop — of Tibetan origin; Sharchop — of Indo- 
Mongoloid origin; aboriginal, or indigenous, tribal peoples; and 
Nepalese. In the early 1990s, the first three groups made up about 
72 percent of the population. According to this estimate, the Nepa- 
lese constituted approximately 28 percent of the population; other 
estimates suggested that 30 to 40 percent might be Nepalese. The 
Nepalese constituted a majority in southern Bhutan, where, in an 
effort to maintain traditional culture and control, the government 
has tried to confine their immigration and restrict their residence 
and employment. In the early 1990s, only approximately 15 per- 
cent of the Nepalese in Bhutan were considered legal permanent 
residents; only those immigrants who had resided in Bhutan for 
fifteen or twenty years — the number of years depended on their 
occupational status and other criteria — were considered for citizen- 
ship. Nepalese immigrants who were asked to leave because their 
claims to citizenship did not conform to the 1985 Citizenship Act 
openly voiced their discontent with the government. Illegal im- 
migrants often were militant antinationals. 

In the 1980s, the Bhutanese, believing their identity threatened 
by absorption of a growing Nepalese minority and the specter of 
annexation by India, promulgated a policy of driglam namzha, "na- 
tional customs and etiquette." This policy sought to preserve and 
enhance Bhutanese cultural identity and bolster Bhutanese nation- 
alism. The policy mandated the wearing of national dress for for- 
mal occasions and the use of the official language, Dzongkha, in 
schools. In 1989, it was decreed that Nepali, which had been offered 
as an optional language, was no longer to be taught in the schools. 
Subsequent government decrees contributed to a growing conflict 
with ethnic Nepalese, who sought to maintain their own identity 
and viewed these edicts as restrictive. Ethnic strife increased as the 
aftereffects of Nepal's prodemocracy movement spread to Bhutan, 
where Nepalese communities demonstrated against the government 

xxii 



in an effort to protect their rights from the driglam namzha policy. 
Expatriate Nepalese political groups in Nepal and India support- 
ed these antigovernment activities, further alienating the Bhutanese. 

Bhutan's military force, the Royal Bhutan Army, is very small; 
in 1990 it numbered only 6,000 persons. The Druk Gyalpo is the 
supreme commander of the army, but daily operations are the 
responsibility of the chief operations officer. The army's primary 
mission is border defense although it also assists the Royal Bhutan 
Police in internal security matters. 

Bhutan, like Nepal, is considered a least-developed country. Its 
work force is largely unskilled, and a wide gap exists between the 
rich and the poor. Farming is the mainstay of the economy and 
accounts for most of the gross domestic product. Although Bhu- 
tan did not begin to establish its industrial base until the 1950s, 
careful economic planning and use of foreign aid have resulted in 
measurable improvements in economic efficiency and performance 
over the last four decades. As is the case in Nepal, tourists bring 
in a major portion of the country's foreign exchange. 

Social status in Bhutan, as in Nepal, depends primarily on eco- 
nomic standing in the community. Specifically, it depends on land- 
ownership, occupation, and perceived religious authority. The 
society is male dominated. Although as of 1992 the government 
officially encouraged increased participation of women in political 
and administrative life, women remained in a secondary position, 
particularly in business and the civil service. Bhutanese women, 
however, do have a dominant social position, and land often pass- 
es to daughters, not to sons. Bhutan's traditional society is both 
matriarchal and patriarchal; the head of the family is the member 
in highest esteem. However, men predominate in government and 
have more opportunities for higher education than do women. 

As of 1992, education in Bhutan is free for eleven years but not 
compulsory. Men have literacy rates about three times higher than 
those for women, and school enrollment levels are higher for males. 
As is the case in Nepal, social services are not widespread. Modern 
medical care is lacking, as are clean drinking water and adequate 
sanitation. Not surprisingly, gastrointestinal diseases are wide- 
spread. Nutrional deficiencies are also prevalent; serious malnutri- 
tion, however, does not appear to be a problem. Like Nepal, the 
country had high morbidity and death rates in the early 1990s. 

Foreign aid, grants, and concessionary loans constituted a large 
percentage of Bhutan's budget in the early 1990s. Like Nepal, Bhu- 
tan received foreign assistance from the United Nations, the Colombo 
Plan (see Glossary), the Asian Development Bank, the World Bank 
(see Glossary), and the Organization of the Petroleum Exporting 



xxin 



Countries, as well as official development assistance and other offi- 
cial flows. Because Bhutan had no formal diplomatic relations with 
the United States as of 1992, no official aid was forthcoming from 
Washington. 

As has been the case in Nepal, Bhutan's foreign policy has been 
affected by its geostrategic location. From the seventh century un- 
til 1860, the country's foreign policy was influenced by Tibet; next 
followed a period of British guidance over foreign affairs. After India 
received independence from Britain in 1947, Bhutan came under 
India's influence. Thimphu and New Delhi's relationship is 
governed by the 1949 Treaty of Friendship between the Govern- 
ment of India and the Government of Bhutan — in force in 
perpetuity — which calls for peace and noninterference in internal 
affairs and New Delhi's guidance and advice in external relations. 
Like Nepal, however, Bhutan has been exhibiting greater indepen- 
dence in its foreign policy, and by the early 1990s was, in effect, 
autonomous in its foreign relations. Thimphu has established 
bilateral diplomatic relations with other countries and has joined 
various multilateral and regional organizations. Bhutan belongs 
to the United Nations, as well as to organizations such as SAARC, 
the Nonaligned Movement, and the Asian Development Bank. It 
does not accept compulsory United Nations International Court 
of Justice jurisdiction. 

Both Nepal and Bhutan were facing refugee problems in the early 
1990s; statistics on the number of refugees come from diverse 
sources and are discrepant. In April 1992, the United Nations High 
Commissioner for Refugees (UNHCR) estimated that since 1986 
more than 30,000 ethnic Nepalese had left Bhutan because of po- 
litical discontent, poor employment prospects, or because they were 
considered illegal immigrants. A much higher figure is projected 
by G.P. Koirala, Nepal's prime minister, who has estimated that 
in the early 1990s Nepalese from Bhutan seeking to escape the sanc- 
tions imposed by driglam namzha arrived in Nepal at the rate of 200 
persons daily. 

Antinationals in Bhutan used the growing number of southern 
Bhutanese-Nepalese in the refugee camps within Nepal as a means 
to publicize and internationalize their plight. To this end, they 
encouraged Nepalese to leave Bhutan and also encouraged Nepa- 
lese from India to enter the camps. For Bhutan, the departure of 
the Nepalese often meant the loss of skilled laborers; however, it 
also resulted in the exodus of unwanted agitators. For Nepal, the 
refugees were an added economic burden — more people needing 
housing, food, clothing, education, and other social services. Liv- 
ing conditions in the refugee camps within Nepal were reported 



xxiv 



to be poor. As of mid- 1992, the camps were filled with people hold- 
ing Nepalese citizenship cards, Bhutanese citizenship cards, and 
UNHCR certificates attesting they were "Bhutanese refugees." 
However, because each party seeks to present its own case, all statis- 
tics and statements related to the Nepalese refugee situation must 
be viewed cautiously. 

The refugee problem presented a challenge to India, which need- 
ed to balance its interests in maintaining Bhutan's stability with 
the necessity of not inflaming nationalist passions among its own 
ethnic Nepalese population and not upsetting its relations with either 
Nepal or Bhutan. India would not allow its territory to be used 
as a staging ground for protests by Bhutanese residents of Nepa- 
lese origin. The situation was further complicated by the fact that 
Indian laborers who entered Nepal in search of work displaced 
underemployed and unemployed Nepalese workers. 

September 10, 1992 

* * * 

Since the Introduction was written, the events taking place in 
Nepal and Bhutan in late 1992 and early 1993 have continued to 
reflect the issues that have faced the two countries in the past few 
years. The refugee issue has continued to be problematic. The lead- 
ers of both Nepal and Bhutan met with India's leaders in late 1992 
and early 1993; all the parties reaffirmed that the issue was an in- 
ternal matter that should be resolved through bilateral talks be- 
tween Nepal and Bhutan. In spite of the agitation and activities 
of antinationals in the south, Bhutan's National Assembly passed 
a National Security Act in late 1 992 that abolished the death penalty 
for crimes of treason as stipulated in a 1957 law, providing instead 
for life imprisonment. 

In December 1992, the Supreme Court of Nepal ruled against 
Prime Minister G.P. Koirala's signing of a December 1991 ac- 
cord for hydroelectric power cooperation with India at Tanakpur. 
After their victory, Koirala's opponents in the Communist Party 
of Nepal (United Marxist-Leninist) pressed him to step down, but 
he refused. As a result of the court's decision, however, Kathmandu 
said the Koirala government would present the Tanakpur accord 
and its relevant documents to the next parliamentary session for 
ratification — a step that would have otherwise been bypassed. 



xxv 



In November 1992, the Nepal Investment Forum, jointly or- 
ganized by the government, the United Nations Development 
Programme, and the United Nations Industrial Development Or- 
ganization, held its inaugural meeting. The forum of investors and 
industrialists aimed to increase investment in the industrial sec- 
tor; Nepal said it would even simplify some economic procedures 
to ensure a favorable investment climate. In December 1992, Nepal 
passed laws to encourage foreign (and local) investment by creat- 
ing a more favorable investment environment. Foreigners would 
be allowed to repatriate earnings and hold total equity in new 
projects. 

In March 1993, communist factions demonstrated against the 
government, protesting the Tanakpur accord as well as power cuts, 
despite an almost 100 percent increase in electricity rates. The com- 
munists also rallied to show their support for an upcoming gener- 
al strike in the Kathmandu Valley. More than 6,000 persons 
participated in the strike, which idled markets, schools, and facto- 
ries. That same month, the Nepal Electricity Authority said pow- 
er cuts could continue until July 1995 because of the water shortage 
in reservoirs. In addition, other dams had technical problems and 
needed refurbishing. 

Also in March, Nepal estimated 100,000 Bhutanese refugees in 
UNHCR-run camps in Nepal and elsewhere. The World Food 
Programme announced in April that it would supply 8,000 tons 
of food until September 1993 to ethnic Nepalese refugees from Bhu- 
tan in southeastern Nepal. Talks between Nepal's foreign minister 
and Bhutan's king at the SAARC summit meeting in April failed 
to resolve the refugee problem. 

In April 1993, King Birendra suspended the fourth session of 
Parliament a day after the House of Representatives agreed by 
unanimous decision to establish an all-party special parliamentary 
committee to evaluate the Tanakpur accord. That same month, 
the government arrested three journalists for allegedly offending 
members of the royal family. 

In mid-May 1993, two senior leaders of the Communist Party 
of Nepal (United Marxist-Leninist) died in an automobile acci- 
dent, which subsequently was being investigated. It was expected 
that a void in the communist leadership would result from the deaths 
of the two leaders. 

Late 1992 and early 1993 brought a number of published reports 
on Bhutan's ethnic problems. The reports were a mix of investi- 
gation, condemnation, explanation, and defense. Prominent among 
these reports was Amnesty International's Bhutan: Human Rights 
Violations Against the Nepali-Speaking Population in the South. Published 



XXVI 



in New York in December 1992, the report was based on Amnesty 
International's investigations of reports of human rights violations 
since late 1990 as well as its delegations' visits to Nepal in Novem- 
ber 1991 to interview Nepali- speaking refugees from Bhutan and 
to Bhutan in January 1992 at the invitation of the Druk Gyalpo 
to discuss the earlier human rights findings and measures to be 
taken to improve the human rights situation. Information provid- 
ed by refugees included charges of arbitrary arrest, detention 
without charge or trial, unfair trials, ill treatment, torture, rape, 
deaths in custody, and inadequate prison conditions. The report 
also outlined measures taken by the Bhutanese government dur- 
ing and after the January 1992 visit to Bhutan: more than 1,500 
political prisoners, including some identified by Amnesty Inter- 
national as prisoners of conscience, were granted amnesty; others 
still imprisoned were allowed regular access to their relatives and 
had their living conditions improved, including the elimination of 
the use of shackles. Other steps taken included punishment of mem- 
bers of security forces involved in human rights violations and the 
introduction of legislation that would eliminate a mandatory death 
penalty for acts of treason. 

Both the Amnesty International report and another written in- 
vestigative report by British academic Michael Hutton, following 
his visits to Bhutan and Nepal and published in the April 1993 is- 
sue of Index on Censorship, attributed the rise of ethnic unrest to Bhu- 
tan' s Citizenship Act of 1985, which retroactively reclassified 
citizenship qualifications; the 1988 census, which revealed the 
presence of some 100,000 illegal residents in southern Bhutan and 
led to mass deportations; and the series of government decisions 
and directives between 1987 and 1989 designed to enforce driglam 
namzha. While Hutton concluded that "journalists are easily misled 
by both sides" on the human rights issue, he noted the contrast 
of the "well-produced" reports written in flawless English by Bhu- 
tan's official press with the "injudiciously emotive" but sometimes 
"extraordinarily thorough" reports coming from Kathmandu-based 
organizations. 

In early May 1993, the Nation [Bangkok] published a revealing 
interview given by Bhutan's minister of foreign affairs, Dawa Tser- 
ing. While strongly denying charges of "ethnic cleansing," Tser- 
ing insisted that "there is no violence" and that the majority of 
people leaving or who have left Bhutan were illegal residents. At 
the encouragement of Amnesty International, he said, the govern- 
ment had agreed to give illegal residents work permits, the same 
as had been granted to outsiders working in Bhutan. He added 
that the government was dismayed that "a big chunk of genuine" 



xxvii 



Bhutanese nationals, that is, legal emigrants, had left the country 
because of fear and insecurity caused not only by antigovernment 
terrorist attacks but also by fear of Bhutanese security forces who 
were "functioning under lots of tension . . . and might sometimes 
be a bit rough on the common people." To reverse this trend, he 
said that the government had exempted legal southern Bhutanese 
citizens from paying land taxes in order to convince them not to 
emigrate. Countering a common misperception, Tsering said that 
Nepali had not been banned and that in National Assembly ses- 
sions both Dzongkha and Nepali, with the Druk Gyalpo's bless- 
ing, were still being spoken — with simultaneous translations. 
However, he defended the government's right to insist that all 
citizens should adopt the national dress and learn the Dzongkha 
language. (Hutton's investigation revealed that many native 
Dzongkha speakers easily used Nepali in their daily dealings with 
Nepali-speaking residents.) Queried about the number of dissidents, 
he admitted that there were approximately 180 people in deten- 
tion, some of whom had been convicted during trial but all of whom 
had been given access to the International Committee of the Red 
Cross starting in January 1993. 

As the mid-1990s approached, Bhutan, like Nepal, was experienc- 
ing a sometimes painful transition to more democratic forms of 
government. Dawa Tsering concluded his interview by offering the 
observation that Bhutan, from its own perspective, "is being highly 
democratized" and that the monarchy "is a contractual monar- 
chy and is very conscious of its responsibilities" of "keep[ing] in 
step with the changing times." 

June 1, 1993 Andrea Matles Savada 



xxvm 



Table A. Nepal: Chronology of Important Events 



Period Description 

ca. 563 B.C. The Buddha born in Lumbini, in Tarai Region 

of Nepal. 

268-31 B.C. Ashoka establishes empire in north India. 

ca. A.D. 353-73 Samudragupta establishes empire in north India. 

400-750 Licchavi kingdom in power in Kathmandu 

Valley. 

750- 1 200 "Transitional' ' kingdom in power in Kathman- 

du Valley. 

1100-1484 Khasa Malla kings rule in western Nepal. 

1200-16 Arimalla, first monarch of the Malla Dynasty, 

rules in Kathmandu Valley. 

1312 Khasa king Ripumalla leads raid in Kathman- 

du Valley. 

1345-46 Sultan Shams ud-din Ilyas of Bengal leads raid 

in Kathmandu Valley. 

1382-95 Jayasthitimalla rules as king of united Malla 

kingdom in Kathmandu Valley. 

1428-82 Yakshamalla reigns — height of united Malla 

kingdom. 

1484 Malla kingdom divided; three kingdoms of 

Kathmandu, Bhadgaon, and Patan ex- 
pand. 

1526 Mughal Empire established in north India. 

1559 Gorkha kingdom established. 

1606-33 Ram Shah of Gorkha reigns; Gorkha king- 

dom experiences first expansion. 

1728 Chinese influence established in Tibet. 

1743 Prithvi Narayan Shah ascends to throne of 

Gorkha. 

1764 British East India Company gains control of 

Bengal. 

1768-90 Gorkha conquers Kathmandu and Patan, Bhad- 

dgaon, eastern Nepal, and western Nepal. 

xxix 



Table A. — Continued 



Period 



Description 



1775 



1982 



Prithvi Narayan Shah dies, first king of united 
Nepal. 

B.P. Koirala, Nepali Congress Party leader, 
dies. 



1986 
1989 

1990 



Second elections held to National Panchayat. 

Failure to renegotiate trade and transit treaties 
with India disrupts economy. 

New constitution promulgated as result of agi- 
tations and successes of Movement for the 
Restoration of Democracy. 



1991 



Elections held to Parliament; first session of first 
multiparty Parliament held in thirty-two 

years. 



XXX 



Nepal and Bhutan: Country Studies 



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XXX11 



Nepal: Country Profile 




Country 

Formal Name: Kingdom of Nepal. 
Short Form: Nepal. 
Term for Citizens: Nepalese. 
Capital: Kathmandu. 

NOTE: The Country Profile contains updated information as available. 

xxxiii 



Date of Independence: 1 768, when a number of independent hill 
states were unified by Prithvi Narayan Shah as the Kingdom of 
Gorkha. 

National Holiday: December 28, birthday of King Birendra Bir 
Bikram Shah Dev. 

Geography 

Location and Size: Landlocked between China and India; total 
land area 147,181 square kilometers. 

Topography: Mountainous and hilly, although with physical diver- 
sity. Three broad physiographic areas run laterally — lowland Tarai 
Region in south; central lower mountains and hills constituting Hill 
Region; high Himalayas, with 8,796-meters-high Mount Everest 
and other peaks forming Mountain Region in north. Of total land 
area, only 20 percent cultivatable. Deforestation severe problem; 
by 1988 forests covered approximately 30 percent of land area. 

Climate: Five climatic zones based on altitude range from sub- 
tropical in south, to cool summers and severe winters in north. An- 
nual rainfall with seasonal variations depending on monsoon cycle, 
which provides 60 to 80 percent of total annual rainfall; 2,500 mil- 
limeters in eastern part of country; 1 ,420 millimeters around Kath- 
mandu; 1,000 millimeters in western Nepal. 

Society 

Population: 15,022,839 at time of 1981 census; estimated 
19,145,800 in July 1990 (July 1991 estimate 19,611,900). Growth 
rate in 1980s 2.6 percent; birth rate 44 per 1,000 in 1985 (39 per 
1,000 in 1991); crude death rate 14 per 1,000 in 1985 (15 per 1,000 
in 1991 — increase from steady decline). Nearly 44 percent of popu- 
lation resides in Tarai Region; about 48 percent in Hill Region, 
nearly 9 percent in Mountain Region. Population density per square 
kilometer total land 102 persons; 61 persons per hectare of cultivat- 
able land. Only 6.3 percent total population in urban areas in 1981 . 
Sex ratio 105 males to 100 females in 1981 . Life expectancy at birth 
close to fifty years in 1985; in 1991, fifty-one years male, fifty years 
female. 

Ethnic Groups: Three major ethnic groups in terms of origin: Indo- 
Nepalese, Tibeto-Nepalese, and indigenous Nepalese, composed 
of Newar, Bhote, Rai, Limbu, Sherpa, Gurung, Tamang, Ma- 
gar, Thakali, Brahman, and other smaller ethnic groups. 



xxxiv 



Languages: Nepali, written in Devanagari script, official, nation- 
al language; spoken by almost 60 percent of population. More than 
twelve other languages with numerous dialects, although rarely 
spoken outside ethnic enclaves. 

Religion: Only official Hindu state in world although intermin- 
gling and synthesis of Hindu and Buddhist beliefs in practice. About 
89.5 percent of population Hindu, approximately 5.3 percent and 
2.7 percent, Buddhist and Muslim, respectively; remainder, other 
religions, including Christianity. 

Education: Literacy rate in 1990 estimated at 33 percent; higher 
percentage males literate; also higher literacy rates in urban areas. 
Free, compulsory primary education, five years; total school en- 
rollment approximately 52 percent school-age children (70 percent 
male, 30 percent female) in 1984. In 1987 primary and secondary 
education included 12,491 primary schools (15,834 in 1989), 3,824 
lower- secondary schools (3,941 in 1989), 1,501 higher- secondary 
schools (1,791 in 1989); apparent primary school enrollment ratio 
85 percent in 1987. In 1989 there were 63,945 primary school 
teachers, 12,245 lower- secondary school teachers, 33,779 higher- 
secondary school teachers. In 1989 students numbered 2,536,147 
at the primary school level, 325,237 in lower-secondary school, and 
338,779 in higher- secondary school. National Education Plan set 
framework for universal education; national development goals 
stressed through curriculum. Tribhuvan University sole doctoral- 
granting institution; sixty-nine public colleges under Tribhuvan 
University; sixty-three private colleges. In 1987, almost 83,000 
students, mostly male, enrolled in higher education institutions. 
Longstanding prejudice against education of women gradually 
diminishing, but social class and geography continue to bias educa- 
tional attainment. 

Health: Infant mortality 98 per 1,000 in 1991. Poor nutrition, sani- 
tation, general absence of modern medical care and other social 
services, especially in rural areas. Goiter, leprosy, intestinal para- 
sites, diarrhea, gastrointestinal disorders, and tuberculosis preva- 
lent although latter somewhat reduced since 1970s. Three types 
health-care practices — popular folk medical care, Ayurvedic treat- 
ment, and modern medicine, sometimes intertwined. Limited 
health-care delivery system; public and private health-care facili- 
ties. Hospitals, mosdy confined to urban areas, provide wider range 
of services than predominantly rural health centers and health posts. 
In 1990 only 123 hospitals, 16 health centers, 816 health posts, and 



xxxv 



153 Ayurvedic dispensaries; 951 physicians, or 1 physician for ap- 
proximately 19,000 persons. 

Economy 

Salient Features: Underdeveloped with economy tied to India as 
result of geographic position and historical relationship. Predomi- 
nantiy agricultural; limited industrial activity; services — particularly 
related to tourism, growing part of economy. In FY 1989, tourism 
provided more than 3.5 percent of GDP and about 25 percent of 
total foreign exchange earnings. Services, remittances of Nepalese 
working outside the country, and foreign loans and grants finance 
the deficit. Economic prospects poor — projected population growth 
expected to outpace growth rate of agricultural production. Under- 
employment estimated at 25-40 percent in 1987; unemployment 
averaged 5 percent. Foreign aid averaged 64 percent of develop- 
ment from 1956-90; 44.4 percent of FY 1991 budget from foreign 
loans or grants. Real growth averaged 4 percent annually in early 
1980s, almost 5 percent in late 1980s, but plummeted to between 
1.5 percent and 2.3 percent in FY 1989 and FY 1990 because of 
trade and transit dispute with India. No labor laws as of 1991; 
limited activity of labor unions, but trade unions legalized follow- 
ing prodemocracy movement. 

Gross National Product: Per capita income for 1988 US$158-180 
range. 

Gross Domestic Product (GDP): US$3 billion in FY 1990. GDP 
increase at constant prices averaged 3.7 percent annually FY 
1975-86; increased 2.1 percent in FY 1990. Foreign aid as per- 
centage of GDP increased from less than 8 percent in 1984 to almost 
13 percent in 1987. Major share of GDP from FY 1979 to FY 1987 
from agricultural sector. 

Agriculture: Dominated economy; livelihood for more than 90 per- 
cent of population; approximately 60 percent GDP and 75 per- 
cent of exports in late 1980s. Some parts of country food deficit 
areas although enough generally produced to feed population; 
production dependent on weather conditions — particularly mon- 
soons, distribution of inputs, scarcity of new lands, and continued 
environmental degradation. Tarai Region main agricultural belt. 
Paddy (rice) and corn major food crops, also wheat and millet; pota- 
toes, oilseed, sugarcane, jute, and tobacco major cash crops. 

Industry: Limited industrial base — less than 20 percent of total 
GDP in 1980s; 7 percent in FY 1990— established with foreign aid. 



xxxvi 



Industries used agricultural products and/or dependent on vari- 
ous imported inputs, particularly from India. Traditional cottage 
industries such as basket-weaving and production of cotton fabrics 
approximately 60 percent of output. 

Manufacturing: Larger plants generally in public sector. Major in- 
dustries include jute, sugar, cigarettes, beer, matches, shoes, chemi- 
cals, cement, and bricks. Small mineral industry; most commodities 
used for domestic construction; cement, clay, limestone, garnet, 
magnesite, and talc most important mineral resources. 

Energy: As of late 1980s, about 95 percent of energy consumed 
from traditional sources — fuelwood, 76 percent (hence deforesta- 
tion). Tremendous potential for hydroelectric power inhibited by 
terrain, lack of infrastructure, and insufficient capital investment. 

Foreign Trade: Traditionally predominantly with India although 
decreased from more than 70 percent in 1975 to 37 percent of to- 
tal trade in 1989. Also unrecorded border trade with India. As a 
result of trade and transit dispute, India's share of exports, 25 per- 
cent in FY 1989, dropped to approximately 9 percent in FY 1990; 
imports fell to only 25 percent FY 1990. Persistent and growing 
trade deficit with India. Other primary trading partners the Unit- 
ed States, Bangladesh, China, Britain, former Soviet Union, West 
Germany, South Korea, Japan, Singapore, Thailand, Hong Kong, 
and Pakistan. Major exports clothing, carpets, grain, and leather 
goods. Major imports petroleum products, fertilizer, and machinery. 

Balance of Payments: Improvement in 1980s as a result of foreign 
loans and assistance although increasing foreign debt. Mid- 1989, 
official foreign debt outstanding and disbursed about US$1.3 bil- 
lion. In FY 1988, exports US$187 million; imports US$630 million. 

Currency/Exchange Rate: 1 Nepalese rupee (NR) or rupee (R) = 
100 paisa. Coins issued in denominations of 1, 5, 10, 25, 50 paisa, 
and 1 rupee; notes issued in denominations of 1, 5, 10, 100, 500, 
and 1,000 rupees. In 1989, Rs per US$1 =27.19; in 1990, 29.37; 
in January 1991, 30.8. Linked to Indian rupee. 

Fiscal Year: 16 July- 15 July. 

Transportation and Communications 

Roads: Many built with foreign assistance. By mid-July 1989, ap- 
proximately 2,900 kilometers paved roads, 1,600 kilometers gravel 
roads, 2,500 kilometers earthen roads. Main roads east- west and 



xxxvn 



north-south highways. Terrain and weather, particularly monsoons, 
factors in building and maintaining roads. 

Railroads: Average 1.5 million passengers annually between FY 
1985-89; goods transported between 15,000 and 19,000 tons (only 
13,000 tons in FY 1990). Limited service, from commercial centers 
in Tarai to railheads near Indian border; two separate rail tracks with 
total length of 101 kilometers; lines south of the border through India. 

Airports: Main airport Tribhuvan International Airport outside 
Kathmandu; more than thirty airfields. Domestic service and in- 
ternational flights to and from Asian and European cities. 
Government-owned Royal Nepal Airlines in 1990 carried 291,208 
domestic passengers, 317,095 passengers on international flights. 

Other Modes of Transportation: Forty-two kilometer ropeway 
from Hetauda into Kathmandu valley transports food, construc- 
tion materials, and heavy goods. Local transportation — bus 
service — common only in Kathmandu Valley. 

Telecommunications: Postal service improved, but still inacces- 
sible for many Nepalese; 2,232 post offices in FY 1990. Public tel- 
ephone services in most urban areas; forty- two exchanges, 
seventy-six public call offices, fifty-five wireless stations in FY 1990. 
Rudimentary radio relay network. Radio programming approxi- 
mately 100 hours weekly. International telephone, telex, and fac- 
simile services available but limited. AM radio broadcast stations, 
but no FM. Limited television programming. 

Government and Politics 

Government: Constitutional monarchy. Multiparty democracy es- 
tablished with November 1990 constitution; replaced panchayat sys- 
tem. First elections to bicameral legislature, Parliament, made up 
of House of Representatives and National Council, held May 1991. 
Executive powers vested in king and Council of Ministers. Prime 
minister appointed by king leader of political party with majority 
in House of Representatives. 

Administrative Divisions: Fourteen zones and seventy-five dis- 
tricts grouped into five development zones. Following prodemocracy 
movement, former village panchayat renamed Village Development 
Committee and town panchayat renamed Municipal Development 
Committee. Each district headed by a chief district officer respon- 
sible for maintaining law and order and coordinating works of field 
agencies of different ministries. 



xxxvin 



Judiciary: Blend of Hindu and Western legal traditions. New ju- 
dicial system established with 1990 constitution. Supreme Court 
at apex of system; fifty-four appellate courts, numerous district 
courts. Judicial Council monitored court system's performance, 
advised king and government on judicial matters and appointments. 

Foreign Relations: Foreign policy focused on maintaining equi- 
distant and friendly relations with India and China. Founding mem- 
ber of non-aligned movement; proposed as zone of peace in 1975; 
active member of South Asian Association for Regional Coopera- 
tion (SAARC — see Glossary) and international organizations. 

Media: Approximately 400 Nepalese newspapers and periodicals 
in 1991. Freedom of expression constitutional right. Radio and tel- 
evision programming controlled by government 

National Security 

Armed Forces: Royal Nepal Army, of about 35,000 volunteers. 
Enlistment for initial period of ten years; former Gurkhas for three 
years. Primary mission to back up local police and maintain secu- 
rity in Kathmandu Valley — the seat of government. No person- 
nel mobilization plan in event of war or declared national 
emergency; no contingency plan to draft during or in anticipation 
of emergency. 

Military Units and Equipment: Fourteen infantry brigades in 
Royal Nepal Army; one air wing in Royal Nepal Army Air Ser- 
vice. Shortages of virtually all categories of weapons and equip- 
ment. Obsolete weapons in inventory. 

Military Budget: In 1989 US$33 million, or approximately 1.2 
percent of GNP and 6.2 percent of total central government ex- 
penditures. 

Foreign Military Relations: Royal Nepal Army personnel serve 
in United Nations Interim Force in Lebanon; Gurkhas also serve 
in British Brigade of Gurkhas, in Hong Kong, India, Singapore, 
and Brunei. 

Police Force: Nepalese Police Force of 28,000 personnel under 
central administration of Ministry of Home Affairs. Overseen by 
king and advisers with little or nor public accountability. 



xxxix 



The all-seeing eyes of the Buddha, a detail from the great stupa 
of Svayambhunath, a Buddhist shrine west of Kathmandu 



NEPAL HAS BEEN A KINGDOM for at least 1 ,500 years. Dur- 
ing most of that period, the Kathmandu Valley has been Nepal's 
political, economic, and cultural center. The valley's fertile soil 
supported thriving village farming communities, and its location 
along trans-Himalayan trade routes allowed merchants and rulers 
alike to profit. Since the fourth century, the people of the Kath- 
mandu Valley have developed a unique variant of South Asian 
civilization based on Buddhism and Hinduism but influenced as 
well by the cultures of local Newar citizens and neighboring Ti- 
betans. One of the major themes in the history of Nepal has been 
the transmission of influences from both the north and the south 
into an original culture. During its entire history, Nepal has been 
able to continue this process while remaining independent. 

The long-term trend in Nepal has been the gradual development 
of multiple centers of power and civilization and their progressive 
incorporation into a varied but eventually united nation. The Lic- 
chavi (fourth to eighth centuries) and Malla (twelfth to eighteenth 
centuries) kings may have claimed that they were overlords of the 
area that is present-day Nepal, but rarely did their effective in- 
fluence extend far beyond the Kathmandu Valley. By the sixteenth 
century, there were dozens of kingdoms in the smaller valleys and 
hills throughout the Himalayan region. It was the destiny of Gor- 
kha, one of these small kingdoms, to conquer its neighbors and 
finally unite the entire nation in the late eighteenth century. The 
energy generated from this union drove the armies of Nepal to con- 
quer territories far to the west and to the east, as well as to challenge 
the Chinese in Tibet and the British in India. Wars with these huge 
empires checked Nepalese ambitions, however, and fixed the 
boundaries of the mountain kingdom. Nepal in the late twentieth 
century was still surrounded by giants and still in the process of 
integrating its many localized economies and cultures into a na- 
tion state based on the ancient center of the Kathmandu Valley. 

Nepal took a fateful turn in the mid-nineteenth century when 
its prime ministers, theoretically administrators in service to the 
king, usurped complete control of the government and reduced the 
kings to puppets. By the 1850s, a dynasty of prime ministers called 
Rana (see Glossary) had imposed upon the country a dictatorship 
that would last about 100 years. The Ranas distrusted both their 
own people and foreigners — in short, anyone who could challenge 
their own power and change their position. As the rest of the world 



3 



Nepal and Bhutan: Country Studies 

underwent modernization, Nepal remained a medieval nation, 
based on the exploitation of peasants and some trade revenues and 
dominated by a tradition-bound aristocracy that had little interest 
in modern science or technology. 

After the revolt against the Ranas in 1950, Nepal struggled to 
overcome its long legacy of underdevelopment and to incorporate 
its varied population into a single nation. One of the early casual- 
ties of this process was party-based democracy. Although political 
parties were crucial in the revolution that overthrew Rana rule, 
their constant wrangling conflicted with the monarchy's views of 
its own dignity and with the interests of the army. Instead of con- 
doning or encouraging a multiparty democracy, King Mahendra 
Bir Bikram Shah Dev launched a coup in late 1960 against Bish- 
weshwar Prasad (B.P.) Koirala's popularly elected government and 
set up a system of indirect elections that created a consultative 
democracy. The system served as a sounding board for public opin- 
ion and as a tool for economic development without exercising ef- 
fective political power. Nepal remained until 1990 one of the few 
nations in the world where the king, wielding absolute authority 
and embodying sacred tradition, attempted to lead his country 
towards the twenty-first century. 

Ancient Nepal, ca. 500 B.C.-A.D. 700 
Early Influences on Nepal 

Neolithic tools found in the Kathmandu Valley indicate that peo- 
ple were living in the Himalayan region in the distant past, although 
their culture and artifacts are only slowly being explored. Written 
references to this region appeared only by the first millennium B.C. 
During that period, political or social groupings in Nepal became 
known in north India. The Mahabharata and other legendary In- 
dian histories mention the Kiratas (see Glossary), who still inhabited 
eastern Nepal in 1991 . Some legendary sources from the Kathman- 
du Valley also describe the Kiratas as early rulers there, taking 
over from earlier Gopals or Abhiras, both of whom may have been 
cowherding tribes. These sources agree that an original popula- 
tion, probably of Tibeto-Burman ethnicity, lived in Nepal 2,500 
years ago, inhabiting small settlements with a relatively low degree 
of political centralization. 

Monumental changes occurred when groups of tribes calling 
themselves the Arya migrated into northwest India between 2000 
B.C. and 1500 B.C. By the first millennium B.C., their culture had 
spread throughout northern India. Their many small kingdoms 



4 



Nepal: Historical Setting 



were constantly at war amid the dynamic religious and cultural 
environment of early Hinduism (see Hinduism, ch. 2). By 500 
B.C. , a cosmopolitan society was growing around urban sites linked 
by trade routes that stretched throughout South Asia and beyond. 
On the edges of the Gangetic Plain, in the Tarai Region, smaller 
kingdoms or confederations of tribes grew up, responding to dangers 
from larger kingdoms and opportunities for trade. It is probable 
that slow and steady migration of Khasa (see Glossary) peoples 
speaking Indo-Aryan languages was occurring in western Nepal 
during this period; this movement of peoples would continue, in 
fact, until modern times and expand to include the eastern Tarai 
as well (see Geography, ch. 2). 

One of the early confederations of the Tarai was the Sakya clan, 
whose seat apparently was Kapilavastu, near Nepal's present-day 
border with India. The clan's most renowned son was Siddhartha 
Gautama (ca. 563-483 B.C.), a prince who rejected the world to 
search for the meaning of existence and became known as the Bud- 
dha, or the Enlightened One. The earliest stories of his life recount 
his wanderings in the area stretching from the Tarai to Banaras 
on the Ganges River and into modern Bihar State in India, where 
he found enlightenment at Gaya — still the site of one of the greatest 
Buddhist shrines. After his death and cremation, his ashes were 
distributed among some of the major kingdoms and confederations 
and were enshrined under mounds of earth or stone called stupas. 
Certainly, his religion was known at a very early date in Nepal 
through the Buddha's ministry and the activities of his disciples 
(see Buddhism, ch. 2). 

The political struggles and urbanization of north India culmi- 
nated in the great Mauryan Empire, which at its height under Asho- 
ka (reigned 268-31 B.C.) covered almost all of South Asia and 
stretched into Afghanistan in the west. There is no proof that Nepal 
was ever included in the empire, although records of Ashoka are 
located at Lumbini, the Buddha's birthplace, in the Tarai. But the 
empire had important cultural and political consequences for Nepal. 
First, Ashoka himself embraced Buddhism, and during his time 
the religion must have become established in the Kathmandu Valley 
and throughout much of Nepal. Ashoka was known as a great 
builder of stupas, and his archaic style is preserved in four mounds 
on the outskirts of Patan (now often referred to as Lalitpur), which 
were locally called Ashok stupas, and possibly in the Svayam- 
bhunath (or Swayambhunath) stupa. Second, along with religion 
came an entire cultural style centered on the king as the upholder 
of dharma, or the cosmic law of the universe. This political con- 
cept of the king as the righteous center of the political system had 



5 



Nepal and Bhutan: Country Studies 

a powerful impact on all later South Asian governments and con- 
tinued to play a major role in modern Nepal. 

The Maury an Empire declined after the second century B.C., 
and north India entered a period of political disunity. The extended 
urban and commercial systems expanded to include much of In- 
ner Asia, however, and close contacts were maintained with Eu- 
ropean merchants. Nepal was apparently a distant part of this 
commercial network because even Ptolemy and other Greek writers 
of the second century knew of the Kiratas as a people who lived 
near China. North India was united by the Gupta emperors again 
in the fourth century. Their capital was the old Maury an center 
of Pataliputra (present-day Patna in Bihar State), during what In- 
dian writers often describe as a golden age of artistic and cultural 
creativity. The greatest conqueror of this dynasty was Samudragup- 
ta (reigned ca. 353-73), who claimed that the "lord of Nepal" paid 
him taxes and tribute and obeyed his commands. It still is impos- 
sible to tell who this lord may have been, what area he ruled, and 
if he was really a subordinate of the Guptas. Some of the earliest 
examples of Nepalese art show that the culture of north India dur- 
ing Gupta times exercised a decisive influence on Nepali language, 
religion, and artistic expression. 

The Early Kingdom of the Licchavis, 400-750 

In the late fifth century, rulers calling themselves Licchavis be- 
gan to record details on politics, society, and economy in Nepal. 
The Licchavis were known from early Buddhist legends as a rul- 
ing family during the Buddha's time in India, and the founder of 
the Gupta Dynasty claimed that he had married a Licchavi prin- 
cess. Perhaps some members of this Licchavi family married mem- 
bers of a local royal family in the Kathmandu Valley, or perhaps 
the illustrious history of the name prompted early Nepalese nota- 
bles to identify themselves with it. In any case, the Licchavis of 
Nepal were a strictly local dynasty based in the Kathmandu Val- 
ley and oversaw the growth of the first truly Nepalese state. 

The earliest known Licchavi record, an inscription of Mana- 
deva I, dates from 464, and mentions three preceding rulers, 
suggesting that the dynasty began in the late fourth century. The 
last Licchavi inscription was in A.D. 733. All of the Licchavi records 
are deeds reporting donations to religious foundations, pre- 
dominantly Hindu temples. The language of the inscriptions is 
Sanskrit, the language of the court in north India, and the script 
is closely related to official Gupta scripts. There is little doubt that 
India exerted a powerful cultural influence, especially through the 
area called Mithila, the northern part of present-day Bihar State. 



6 



Svayambhunath stupa, 
decked with multicolored 
Buddhist prayer flags 
Courtesy Harvey Follender 




Politically, however, India again was divided for most of the Lic- 
chavi period. 

To the north, Tibet grew into an expansive military power 
through the seventh century, declining only by 843. Some early 
historians, such as the French scholar Sylvain Levi, thought that 
Nepal may have become subordinate to Tibet for some time, but 
more recent Nepalese historians, including Dilli Raman Regmi, 
deny this interpretation. In any case, from the seventh century on- 
ward a recurring pattern of foreign relations emerged for rulers 
in Nepal: more intensive cultural contacts with the south, poten- 
tial political threats from both India and Tibet, and continuing trade 
contacts in both directions. 

The Licchavi political system closely resembled that of north- 
ern India. At the top was the "great king" (maharaja), who in 
theory exercised absolute power but in reality interfered little in 
the social lives of his subjects. Their behavior was regulated in ac- 
cordance with dharma through their own village and caste coun- 
cils. The king was aided by royal officers led by a prime minister, 
who also served as a military commander. As the preserver of right- 
eous moral order, the king had no set limit for his domain, whose 
borders were determined only by the power of his army and 
statecraft — an ideology that supported almost unceasing warfare 
throughout South Asia. In Nepal's case, the geographic realities 
of the hills limited the Licchavi kingdom to the Kathmandu Valley 



7 



Nepal and Bhutan: Country Studies 

and neighboring valleys and to the more symbolic submission of 
less hierarchical societies to the east and west. Within the Licchavi 
system, there was ample room for powerful notables (samanta) to 
keep their own private armies, run their own landholdings, and 
influence the court. There was thus a variety of forces struggling 
for power. During the seventh century, a family known as the Ab- 
hira Guptas accumulated enough influence to take over the govern- 
ment. The prime minister, Amsuvarman, assumed the throne 
between approximately 605 and 641, after which the Licchavis 
regained power. The later history of Nepal offers similar exam- 
ples, but behind these struggles was growing a long tradition of 
kingship. 

The economy of the Kathmandu Valley already was based on 
agriculture during the Licchavi period. Artworks and place-names 
mentioned in inscriptions show that settlements had filled the en- 
tire valley and moved east toward Banepa, west toward Tisting, 
and northwest toward present-day Gorkha. Peasants lived in vil- 
lages (grama) that were administratively grouped into larger units 
(drangd) . They grew rice and other grains as staples on lands owned 
by the royal family, other major families, Buddhist monastic or- 
ders (sangha), or groups of Brahmans (agrahara). Land taxes due 
in theory to the king were often allocated to religious or charitable 
foundations, and additional labor dues (vishti) were required from 
the peasantry in order to keep up irrigation works, roads, and 
shrines. The village head (usually known as pradhan, meaning a 
leader in family or society), and leading families handled most lo- 
cal administrative issues, forming the village assembly of leaders 
(panchalika or grama pane ha). This ancient history of localized deci- 
sion making served as a model for late twentieth-century develop- 
ment efforts. 

One of the most striking features of present-day Kathmandu Val- 
ley is its vibrant urbanism, notably at Kathmandu, Patan, and 
Bhadgaon (also called Bhaktapur), which apparently goes back to 
ancient times. During the Licchavi period, however, the settlement 
pattern seems to have been much more diffuse and sparse. In the 
present-day city of Kathmandu, there existed two early villages — 
Koligrama ("Village of the Kolis," or Yambu in Newari), and 
Dakshinakoligrama ("South Koli Village," or Yangala in Newari) — 
that grew up around the valley's main trade route. Bhadgaon was 
simply a small village then called Khoprn (Khoprngrama in San- 
skrit) along the same trade route. The site of Patan was known 
as Yala ("Village of the Sacrificial Post," or Yupagrama in San- 
skrit). In view of the four archaic stupas on its outskirts and its 
very old tradition of Buddhism, Patan probably can claim to be 



8 



Nepal: Historical Setting 



the oldest true center in the nation. Licchavi palaces or public build- 
ings, however, have not survived. The truly important public 
sites in those days were religious foundations, including the ori- 
ginal stupas at Svayambhunath, Bodhnath, and Chabahil, as well 
as the shrine of Shiva at Deopatan, and the shrine of Vishnu at 
Hadigaon. 

There was a close relationship between the Licchavi settlements 
and trade. The Kolis of present-day Kathmandu and the Vrijis 
of present-day Hadigaon were known even in the Buddha's time 
as commercial and political confederations in north India. By the 
time of the Licchavi kingdom, trade had long been intimately con- 
nected with the spread of Buddhism and religious pilgrimage. One 
of the main contributions of Nepal during this period was the trans- 
mission of Buddhist culture to Tibet and all of central Asia, through 
merchants, pilgrims, and missionaries. In return, Nepal gained 
money from customs duties and goods that helped to support the 
Licchavi state, as well as the artistic heritage that made the valley 
famous. 

Medieval Nepal, 750-1750 

Transition to the Medieval Kingdom, 750-1000 

The period following the decline of the Licchavi Dynasty wit- 
nessed little growth in the geographical or administrative power 
of the Nepalese state. In fact, it is the least understood time in 
Nepal's history, with only a very few inscriptional sources sup- 
plemented by some dated religious manuscripts. It appears that 
the Kathmandu Valley and surrounding valleys officially remained 
part of a single political unit, although there were struggles for the 
throne among different royal lineages and notable families. Dona- 
tions to religious foundations were dated by a new Newari era be- 
ginning in 879, a development suggesting the founding of a new 
dynasty. Surviving records show a movement away from Sanskrit 
and admixtures of early Newari, the language of the Newar peo- 
ple in the valley. 

The main influences on Nepal continued to come from Mithila 
or Tirhut to the south. This area came intermittently under the 
domination of warriors allied to the Chalukya Dynasty from Kar- 
nataka in southern India. One of their lieutenants proclaimed him- 
self king in 1097 and founded a capital at Simraongarh in the Tarai. 
From there he launched raids that allowed the Chalukyas to later 
claim domination over Nepal without exerting a perceptible im- 
pact on Nepalese history. By the late twelfth century, however, 
the king in Nepal was called Somesvaradeva (or Someswaradeva, 



9 



Nepal and Bhutan: Country Studies 

reigned ca. 1 178-85), a name of Chalukya kings, indicating some 
degree of political contact with Indian rulers. By the end of Some- 
svaradeva's reign, there was evidence of mounting political chaos 
and fighting for the throne. 

Profound changes were occurring in the religious system of 
Nepal. The early patronage of Buddhism by the kings gave way 
to a more strictly Hindu devotion, based on the worship of a vari- 
ety of deities but ultimately relying on Pashupatinath, the site of 
one of Hinduism's most sacred Shiva shrines. Within the Bud- 
dhist community, the role of the monks and monasteries changed 
slowly but radically. Early Buddhism had rested on the celibacy 
and meditation of monks and nuns who had withdrawn from the 
world in their own living complexes (vihara). As a more ritualistic 
vajrayana Buddhism expanded, a division grew up between the 
"teachers of the thunderbolt" (vqjracharyd) and ordinary monks 
(bhikshu), leading to caste-like divisions and the marriage of reli- 
gious teachers. The higher-ranking teachers monopolized the wor- 
ship in the monasteries and controlled the revenues brought in from 
monastic estates. Monasteries became social and economic centers, 
serving as workshops and apartments as well as shrines. These roles 
were kept intact well into the twentieth century. 

The Malla Kings 

Beginning in the early twelfth century, leading notables in Nepal 
began to appear with names ending in the term malla, (wrestler 
in Sanskrit), indicating a person of great strength and power. 
Arimalla (reigned 1200-16) was the first king to be so called, and 
the practice of adopting such a name was followed regularly by 
rulers in Nepal until the eighteenth century. (The names of the 
Malla kings were also represented as, for example, Ari Malla.) This 
long Malla period witnessed the continued importance of the Kath- 
mandu Valley as a political, cultural, and economic center of Nepal. 
Other areas also began to emerge as significant centers in their own 
right, increasingly connected to the Kathmandu Valley. 

The time of the earlier Malla kings was not one of consolidation 
but was instead a period of upheaval in and around Nepal. In the 
twelfth century, Muslim Turks set up a powerful kingdom in In- 
dia at Delhi, and in the thirteenth century they expanded their con- 
trol over most of northern India. During this process, all of the 
regional kingdoms in India underwent a major reshuffling and con- 
siderable fighting before they eventually fell under Delhi's control. 
This process resulted in an increasing militarization of Nepal's 
neighbors and sections of Nepal as well. For example, in western 
Nepal, around Dullu in the Jumla Valley, an alternative seat of 



10 



Majestic view, Shipton Pass, in the Makulu region 

Courtesy Linda Galantin 

political and military power grew up around a separate dynasty 
of Mallas (who were not related to the Mallas of the Kathmandu 
Valley), who reigned until the fourteenth century. These Khasa 
kings expanded into parts of western Tibet and sent raiding expe- 
ditions into the Kathmandu Valley between 1275 and 1335. In 1312 
the Khasa king, Ripumalla, visited Lumbini and had his own in- 
scription carved on Ashoka's pillar. He then entered the Kathman- 
du Valley to worship publicly at Matsyendranath, Pashupatinath, 
and Svayambhunath. These acts were all public announcements 
of his overlordship in Nepal and signified the temporary break- 
down of royal power within the valley. At the same time, the rul- 
ers in Tirhut to the south led raids into the valley until they were 
in turn overrun by agents of the Delhi Sultanate. The worst blow 
came in 1345-46, when Sultan Shams ud-din Ilyas of Bengal led 
a major pillaging expedition into the Kathmandu Valley, result- 
ing in the devastation of all major shrines. In fact, none of the ex- 
isting buildings in the valley proper dates from before this raid. 

The early Malla period, a time of continuing trade and the rein- 
troduction of Nepalese coinage, saw the steady growth of the small 
towns that became Kathmandu, Patan, and Bhadgaon. Royal 
pretenders in Patan and Bhadgaon struggled with their main rivals, 
the lords of Banepa in the east, relying on the populations of their 



11 



Xepal and Bhutan: Country Studies 

towns as their power bases. The citizens of Bhadgaon viewed 
Devaladevi as the legitimate, independent queen. The betrothal 
in 1354 of her granddaughter to Jayasthitimalla. a man of obscure 
but apparently high birth, eventually led to the reunification of the 
land and a lessening of strife among the towns. 

By 1370 Jayasthitimalla controlled Patan, and in 1374 his forces 
defeated those in Banepa and Pharping. He then took full control 
of the country from 1382 until 1395. reigning in Bhadgaon as the 
husband of the queen and in Patan with full regal tides. His authori- 
ty was not absolute because the lords of Banepa were able to pass 
themselves off as kings to ambassadors of the Chinese Ming em- 
peror who traveled to Xepal during this time. Nevertheless. 
Jayasthitimalla united the entire valley and its environs under his 
sole rule, an accomplishment still remembered with pride by Nepa- 
lese. particularly Xewars. The first comprehensive codification of 
law in Xepal. based on the dharma of ancient religious textbooks, 
is ascribed to Jayasthitimalla. This legendary compilation of tra- 
ditions was seen as the source of legal reforms during the nineteenth 
and twentieth centuries. 

After the death of Jayasthitimalla. his sons divided the kingdom 
and ruled collegially. until Jay ajyotirmalla. the last surviving son. 
ruled on his own from 1408 to 1428. His son. Yakshamalla (reigned 
ca. 1428-82), represented the high point of the M alias as rulers 
of a united Xepal. Under his rule, a military raid was launched 
against the plains to the south, a very rare event in Xepalese his- 
tory. Yakshamalla built the Mul Chok in 1455. which remains the 
oldest palace section in Bhadgaon. The struggles among the land- 
ed aristocracy and leading town families (pradhan), especially acute 
in Patan. were controlled during his reign. Outlying areas such 
as Banepa and Pharping were semi-independent but acknowledged 
the leadership of the king. X'ewari appeared more often as the lan- 
guage of choice in official documents. The royal family began to 
accept Manesvari (also known as Taleju). a manifestation of Shi- 
va's consort, as their personal deity. 

The Three Kingdoms 

After 1482. a crucial date in Xepalese history, the kingdom be- 
came divided. At first, the six sons of Yakshamalla attempted to 
reign collegially. in their grandfathers' pattern. Ratnamalla was 
the first to rebel against this system of joint rule, seizing Kathmandu 
in 1484 and ruling there alone until his death in 1520. Rayamalla, 
the eldest brother, ruled Bhadgaon with the other brothers until his 
death, when the crown there passed into the hands of his descen- 
dants. Banepa broke away under Ramamalla until its reincorporation 



12 



Nepal: Historical Setting 



into the Bhadgaon kingdom in 1649. Patan remained aloof, domi- 
nated by factions of its local nobility, until Sivasimhamalla, a 
descendant of Ratnamalla, conquered it in 1597 and united it with 
Kathmandu. On his death, however, Kathmandu and Patan were 
given to different grandsons and again separated. The center of 
Nepal thus remained split into three competing kingdoms, rough- 
ly based on Bhadgaon, Kathmandu, and Patan. The influence of 
these petty kingdoms outside the valley varied over time. Bhad- 
gaon extended its feeble power as far as the Dudh Kosi in the east, 
Kathmandu controlled areas to the north and as far west as 
Nuwakot, and Patan included territories to the south as far as Mak- 
wanpur. The relationships among the kingdoms within the valley 
became quite convoluted. Although all three ruling houses were 
related and periodically intermarried, their squabbles over minus- 
cule territorial gains or ritual slights repeatedly led to warfare. The 
kings attended coronation rituals or marriages at each other's cap- 
itals and then plotted the downfalls of their relatives. 

The period of the three kingdoms — the time of the later Mallas — 
lasted until the mid-eighteenth century. The complete flowering 
of the unique culture of the Kathmandu Valley occurred during 
this period, and it was also during this time that the old palace 
complexes in the three main towns achieved much of their present- 
day forms. The kings still based their legitimate rule on their role 
as protectors of dharma, and often they were devout donors to re- 
ligious shrines. Kings built many of the older temples in the val- 
ley, gems of late medieval art and architecture, during this late 
Malla period. Buddhism remained a vital force for much of the 
population, especially in its old seat of Patan. Religious endow- 
ments called guthi arranged for long-term support of traditional 
forms of worship or ritual by allowing temple or vihara lands to 
pass down through generations of the same families; this support 
resulted in the preservation of a conservative art, architecture, and 
religious literature that had disappeared in other areas of South 
Asia. Newari was in regular use as a literary language by the four- 
teenth century and was the main language in urban areas and trad- 
ing circles based in the Kathmandu Valley. Maithili, the language 
of the Tirhut area to the south, became a popular court language 
during the seventeenth century and still was spoken by many peo- 
ple in the Tarai in the late twentieth century. In the west, Khas 
bhasha, or the language of the Khasa, was slowly expanding, only 
later to evolve into present-day Nepali. 

The final centuries of Malla rule were a time of great political 
change outside the Kathmandu Valley. In India overlordship in 
Delhi fell to the powerful Mughal Dynasty (1526-1858). Although 



13 



Nepal and Bhutan: Country Studies 

the Mughals never exercised direct lordship over Nepal, their em- 
pire had a major indirect impact on its institutional life. During 
the sixteenth century, when the Mughals were spreading their rule 
over almost all of South Asia, many dispossessed princes from the 
plains of northern India found shelter in the hills to the north. 

Legends indicated that many small principalities in western Nepal 
originated in migration and conquest by exiled warriors, who add- 
ed to the slow spread of the Khasa language and culture in the west. 
Along with these exiles came Mughal military technology, includ- 
ing firearms and artillery, and administrative techniques based on 
land grants in return for military service. The influence of the 
Mughals is reflected in the weapons and dress of Malla rulers in 
contemporary paintings and in the adoption of Persian terminolo- 
gy for administrative offices and procedures throughout Nepal. 

Meanwhile, in Tibet domestic struggles during the 1720s led to 
decisive intervention by the powerful Qing rulers of China 
(1644-1911). A Chinese force installed the sixth Dalai Lama (the 
highest ranking Tibetan religious leader) in Lhasa in 1728, and 
thereafter the Chinese stationed military governors iamban) in Lhasa 
to monitor local events. In 1729 representatives of the three Nepalese 
kingdoms sent greetings and presents to the Chinese emperor in 
Beijing, after which the Qing viewed Nepal as an outlying tribu- 
tary kingdom (a perception not shared within Nepal). The expan- 
sion of big empires in both the north and south thus took place 
during a time when Nepal was experiencing considerable weak- 
ness in its traditional center. The three kingdoms lived a charmed 
life — isolated, independent, and quarreling in their mountain 
valley — as the systems around them became larger and more cen- 
tralized. 

By the seventeenth century, the mountain areas to the north of 
the valley and the Kiranti region to the east were the only areas 
that maintained traditional tribal communal systems, influenced 
to various degrees by Hindu ideas and practices. In the west and 
the south of the three kingdoms, there were many petty states ruled 
by dynasties of warrior (Kshatriya) status, many claiming an ori- 
gin among princely, or Rajput, dynasties to the south. In the near 
west, around the Narayani River system (the Narayani was one 
of the seven Gandak rivers), there was a loose confederation of prin- 
cipalities called the Chaubisi (the Twenty-four), including Mak- 
wanpur and Palpa. In the far west, around the Karnali River 
system, there was a separate confederation called the Baisi (the 
Twenty-two), headed by the raja of Jumla. The confederations 
were in constant conflict, and their member states were constantly 



14 



Nepal: Historical Setting 



quarreling with each other. The kingdoms of Kathmandu, Patan, 
and Bhadgaon periodically allied themselves with princes among 
these confederations. All of these small, increasingly militarized 
states were operating individually at a higher level of centralized 
organization than ever before in the hills, but they were expend- 
ing their resources in an almost anarchic struggle for survival. There 
was an awareness of the distinct culture of the Himalayan area but 
no real concept of Nepal as a nation. 

The first contacts between the people of Nepal and Europeans 
also occurred during the period of the later Mallas. The Portuguese 
missionaries John Cabral and Stephen Cacella visited Lhasa in 
1628, after which Cabral traveled to Nepal. The first Capuchin 
mission was founded in Kathmandu in 1715. These contacts, 
however, affected only a minuscule number of people. Of far greater 
importance was the growth of British power in India, notably in 
Bengal to the southeast of Nepal, during the eighteenth century. 
By 1764 the British East India Company, officially a private trad- 
ing corporation with its own army, had obtained from a decaying 
Mughal Empire the right to govern all of Bengal, at that time one 
of the most prosperous areas in Asia. The company explored pos- 
sibilities for expanding its trade or authority into Nepal, Bhutan, 
and toward Tibet, where the Nepalese had their own trading agen- 
cies in important settlements (see fig. 2). The increasingly power- 
ful company was emerging as a wild card that could in theory be 
played by one or more of the kingdoms in Nepal during local strug- 
gles, potentially opening the entire Himalayan region to British 
penetration. 

The Making of Modern Nepal 

The Expansion of Gorkha 

Among the small hill states struggling for power during the later 
Malla period was Gorkha (see Glossary), founded in 1559 by 
Dravya Shah in an area chiefly inhabited by Magars. Legends trace 
his dynasty to warrior princes who immigrated from Rajputana 
in India during the fifteenth century. During its early fight for ex- 
istence, the House of Gorkha stayed out of the two major confeder- 
ations in western Nepal. No major expansion of the kingdom 
occurred until the reign of Ram Shah, from 1606 to 1633, who 
extended his territories slightly in all directions. During the seven- 
teenth and early eighteenth centuries, Gorkha continued a slow 
expansion and appeared increasingly often as an ally of one or more 
of the three kingdoms in their quarrels with each other, giving the 
rulers of the hill state experience in the affairs of the Kathmandu 



15 



Nepal and Bhutan: Country Studies 



SOVIET 
UNION 



r-1 



International boundary 

International boundary 
in dispute 

National capital 

Populated place 

1 00 200 Kilometers 



^^AFGHANISTAN 



PAKISTAN 



L 

V 



^ Jammu 
L. 



■ 

9 Lahore 

> 



\ 

x 

t 



CHINA 



Dehra 
Dun M 



V 



0e//i/\ 



V 



NEPAL 



s 



V. Kathmandu^ :}/. r ] / 



Gorakhpur 



Gangtoi< m S 



Patna 



(BANGLADESHI 



+ f*^ 

INDIA V o 

S 




Figure 2. Nepal and Bhutan, 1991 



16 



Nepal: Historical Setting 



Valley. Nar Bhupal Shah (reigned 1716-42) extended his lands 
toward the Kairang Pass in the north and Nuwakot in the east. 
He attempted to take Nuwakot and failed, but he did arrange the 
marriage of his son to the daughter of the raja of Makwanpur. 

This son, Prithvi Narayan Shah (reigned 1743-75), made full 
use of his position to achieve supreme power and was one of the 
great figures in Nepalese history. Following in his father's foot- 
steps, he apparently dedicated himself at an early age to the con- 
quest of the valley and the creation of a single state. Before going 
on the offensive, he traveled to Banaras, or Varanasi, to seek finan- 
cial assistance and purchase armaments, thus obtaining a personal 
view of conditions in the outside world, especially the position of 
the British East India Company. On his return to Gorkha, he es- 
tablished a number of arsenals and trained his troops to use the 
more modern weapons he had obtained in India. He arranged al- 
liances with, or bought the neutrality of, neighboring states. 

When King Ranajit of Bhadgaon (reigned 1722-69) quarreled 
with King Jayaprakasa of Kathmandu (reigned 1735-68), Prithvi 
Narayan Shah took Nuwakot and laid siege to Kirtipur, which was 
controlled by the king of Patan, Tej Narasimha (reigned 1765-68). 
During the fighting, Prithvi Narayan Shah was almost killed, and 
when his troops failed to take the town, he withdrew. At this point, 
he changed direction, as the Gorkhas were to do effectively time 
and again. The Gorkhas instituted a blockade of the entire valley, 
closed off all trade routes, and began executing blockade runners. 
Gorkha agents remained active in the towns, and the army attempt- 
ed to starve the valley into submission. 

When a second siege of Kirtipur also was unsuccessful, Prithvi 
Narayan Shah turned his attention toward Lamji, one of the Chau- 
bisi principalities, and overran it after several bloody battles. The 
Gorkha army reappeared at Kirtipur. After a siege of six months, 
the town was treacherously delivered to the Gorkhas, and its in- 
habitants were deliberately mutilated. The Gorkhas moved on to 
Patan in 1767, but their attention was diverted by the appearance 
of a 2,400-man expeditionary force sent by the British East India 
Company to aid the traditional kings of the valley. The British 
column, ravaged by malaria contracted in the Tarai, had to with- 
draw quickly without accomplishing anything other than delaying 
the Gorkhas. This token opposition by the British, however, was 
not forgotten by Prithvi Narayan Shah and his successors. With 
the field again clear, on September 29, 1768, Gorkha troops in- 
filtrated Kathmandu while the population was celebrating a reli- 
gious festival and took the town without a fight. Jayaprakasa fled 
to Bhadgaon with Tej Narasimha, and Prithvi Narayan Shah was 



17 



Nepal and Bhutan: Country Studies 

crowned king of Kathmandu. He soon entered Patan unopposed 
and then moved against villages east of Bhadgaon, arriving before 
the town the next year. His troops were admitted into Bhadgaon 
by nobles who had been bought off. Ranajit retired to Banaras, 
Jayaprakasa retired to die at the shrine of Pashupatinath, and Tej 
Narasimha died in prison. For the first time, the hill ruler, the raja 
of Gorkha, had become sole ruler in the Kathmandu Valley. One 
of his first acts in 1769 was to expel permanently from his territo- 
ries all foreigners, including traders, Roman Catholic missionaries, 
and even musicians or artists influenced by northern India's style. 

The conquest of the three kingdoms was only the beginning of 
a remarkable explosion of Gorkha military power throughout the 
Himalayan region. Prithvi Narayan Shah quickly made a move- 
ment toward the Chaubisi states in the west, but after encounter- 
ing resistance in Tanahu, the Gorkha armies drove east into the 
Kirata country, overrunning all of eastern Nepal by 1773. They 
were poised for the invasion of Sikkim, but because its rulers came 
from Tibet, Sikkim was viewed as a client of Tibet (and thus of 
the Chinese). A warning from Tibet and the death of Prithvi 
Narayan Shah in 1775 stalled hostilities, but a full-scale invasion 
began in 1779. Resistance was encountered until 1788, when Gor- 
kha forces drove the ruler of Sikkim into exile in Tibet and occupied 
all of western Sikkim. Guerrilla warfare continued as the Gorkhas 
constructed a base near Vijaypur to administer the eastern con- 
quests. In the west, a marriage alliance with the rajas of Palpa kept 
them quiet while General Ram Krishna Rana conquered Tanahu 
and Lamjung (Gorkha' s traditional rival) and advanced to Kaski 
by 1785. By 1790 all rulers as far as the Kali River had submitted 
to the Gorkhas or had been replaced. Even farther to the west lay 
Kumaon, in the throes of civil strife between two coalitions of zamin- 
dar (large landowners responsible for tax collection in their juris- 
dictions), who struggled to control the monarchy. One group invited 
the intervention of the Gorkhas, who defeated local forces in two 
battles and occupied the capital, Almora, in 1790. The Gorkhas 
were poised for greater adventures, but by then they were irritating 
bigger players and began to encounter resistance to their ambitions. 

The Struggle for Power at Court 

The premature death of Pratap Singh Shah (reigned 1775-77), 
the eldest son of Prithvi Narayan Shah, left a huge power vacuum 
that remained unfilled for decades, seriously debilitating the emerg- 
ing Nepalese state. Pratap Singh Shah's successor was his son, Rana 
Bahadur Shah (reigned 1777-99), aged two and one-half years at his 
accession. The acting regent until 1785 was Queen Rajendralakshmi, 



18 



Nepal: Historical Setting 



followed by Bahadur Shah (reigned 1785-94), the second son of 
Prithvi Narayan Shah. Court life was consumed by rivalry cen- 
tered on alignments with these two regents rather than on issues 
of national administration. In 1794 the king came of age, and in 
1797 he began to exercise power on his own. Rana Bahadur's youth 
had been spent in pampered luxury amid deadly intrigue and had 
made him incapable of running either his own life or the country. 
He became infatuated with a Maithili Brahman widow, Kantava- 
ti, and cleared the way to the throne for their illegitimate son, Gir- 
van Yuddha Shah. Disconsolate after the death of his mistress in 
1799, Rana Bahadur began to engage in such irrational behavior 
that leading citizens demanded his abdication. He was forced to 
turn his throne over to Girvan Yuddha Shah, aged one and one- 
half years, and retired to Banaras. 

During the minority of the king, Damodar Pande took over the 
administration as mukhtiyar, or prime minister (1799-1804), with 
complete control over administration and the power to conduct for- 
eign affairs. He set a significant precedent for later Nepalese his- 
tory, which has seen a recurring struggle for effective power between 
king and prime minister. The main policy of Damodar Pande was 
to protect the young king by keeping his unpredictable father in 
Banaras and to play off against each other the schemes of the re- 
tired king's wives. By 1804 this policy had failed. The former king 
engineered his return and took over as mukhtiyar. Damodar Pande 
was executed and replaced by Bhimsen Thapa as chief adminis- 
trator {kaji). In a bizarre turn of events on April 25, 1806, Rana 
Bahadur Shah quarreled in open court with his half-brother, Sher 
Bahadur. The latter drew his sword and killed Rana Bahadur Shah 
before being cut down by a nearby courtier. Taking advantage of 
this opportunity, Bhimsen Thapa became prime minister (1806-37), 
and the junior queen, Tripurasundari, became regent (1806-32). 
They cooperated to liquidate ninety-three of their enemies. The 
death of Girvan Yuddha Shah in 1816 and the accession of his in- 
fant son meant the retention of the regency. 

The struggle for power at the court had unfortunate consequences 
for both foreign affairs and for internal administration. All parties 
tried to satisfy the army in order to avoid interference in court af- 
fairs by leading commanders, and the military was given a free 
hand to pursue ever larger conquests. As long as the Gorkhas were 
invading disunited hill states, this policy — or lack of policy — was 
adequate. Inevitably, continued aggression led Nepal into disas- 
trous collisions with the Chinese and then with the British (see The 
Enclosing of Nepal, this ch.). At home, because power struggles 
centered on control of the king, there was little progress in sorting 



19 



Nepal and Bhutan: Country Studies 

out procedures for sharing power or expanding representative in- 
stitutions. A consultative body of nobles, a royal court called the 
Assembly of Lords (Bharadari Sabha), was in place after 1770 and 
it had substantial involvement in mayor policy issues. The assem- 
bly consisted of high government officials and leading courtiers, 
all heads of important Gorkha families. In the intense atmosphere 
surrounding the monarch, however, the Assembly of Lords broke 
into factions that fought for access to the prime minister or regent, 
and alliances developed around patron/client relationships. 

Five leading families contended for power during this period — 
the Shahs, Choutariyas, Thapas, Basnyats, and Pandes. Working 
for these families and their factions were hill Brahmans, who acted 
as religious preceptors or astrologers, and Newars, who occupied 
secondary administrative positions. No one else in the country had 
any influence on the central government. When a family or fac- 
tion achieved power, it killed, exiled, or demoted members of op- 
posing alliances. Under these circumstances, there was little 
opportunity for either public political life or coordinated economic 
development. 

The Enclosing of Nepal 

The Gorkha state had its greatest success in expanding to the 
east and west, but it also pressed northward toward Tibet. There 
was a longstanding dispute with the government of Tibet over trade 
issues, notably the status of Nepalese merchants in Lhasa and other 
settlements and the increasing debasement of coinage used in Tibet. 
There also was a dispute over control of the mountain passes into 
Tibet, including the Kuti and Kairang passes north of Kathman- 
du. In the 1780s, Nepal demanded that Tibet surrender territory 
around the passes. When the Tibetans refused, the Nepalese closed 
trade routes between Lhasa and Kathmandu. In 1788 the Nepalese 
overran Sikkim, sent a punitive raid into Tibet, and threatened 
Shigatse, seat of the Panchen Lama, the second highest-ranking 
lama in Tibet. They received secret assurances of an annual pay- 
ment from the Tibetan and local Chinese authorities, but when 
the agreement was not honored they invaded again in 1791, pil- 
laging the monastery at Shigatse before withdrawing to Nepal. 
These acts finally moved the emperor in Beijing to send a huge 
army to Tibet. Alarmed, the government in Kathmandu conclud- 
ed a trade agreement with the British East India Company, hop- 
ing for aid in their struggle. They were to be disappointed because 
the British had no intention of confronting China, where there were 
so many potential trading opportunities. 



20 



Nepal: Historical Setting 



In 1 792 the Chinese forces easily forced the Nepalese out of Tibet 
and pursued them to within thirty-five kilometers of Kathmandu. 
The Nepalese were forced to sign a humiliating treaty that took 
away their trading privileges in Tibet. It made them subordinate 
to the Qing Empire and required them to pay tribute to Beijing 
every five years. Thus, Nepal was enclosed on the north, and the 
British had again shown themselves to be untrustworthy. 

The kingdom of Garhwal to the west was mostly hill country 
but included the rich vale of Dehra Dun. During the late eigh- 
teenth century, the kingdom had been devastated by conquerors 
as varied as Afghans, Sikhs from the Punjab, and Marathas from 
western India. The armies of Nepal were poised to attack Garhwal 
in 1790, but the affair with Tibet shifted their attention. In 1803 
after Garhwal was devastated by an earthquake, the Nepalese ar- 
mies moved in, defeated and killed the raja of Garhwal in battle, 
and annexed a ruined land. General Amar Singh Thapa moved 
farther west and during a three-year campaign defeated or bought 
off local princes as far as Kangra, the strongest fort in the hills. 
The Nepalese laid siege to Kangra until 1809, when Ranjit Singh, 
ruler of the Sikh state in the Punjab, intervened and drove the Nepa- 
lese army east of the Sutlej River. Amar Singh Thapa spent several 
years putting down rebellions in Garhwal and Kumaon, towns that 
submitted to military occupations but were never fully integrated 
into Gorkha. The Nepalese were being checked in the west. 

There had been little direct contact with the lands controlled by 
the British East India Company or its clients, but by the early 1800s 
a confrontation was becoming more likely. Just as Nepal had been 
expanding toward the west throughout the late eighteenth centu- 
ry, so the company had steadily added to its annexed or depen- 
dent territories all the way to the Punjab. Amar Singh Thapa 
claimed lowland areas of Kumaon and Garhwal as part of his con- 
quests, but David Ochterlony, the British East India Company's 
representative in the west, kept up constant diplomatic resistance 
against such claims, which were not pressed. In 1804 Palpa was 
finally annexed by Gorkha and along with it came claims to parts 
of the Butawal area in the Tarai. As Nepalese troops slowly oc- 
cupied those tracts, local landlords complained to the company that 
their rights were being violated. Similar claims to Saran District 
led to armed clashes between Nepalese troops and the forces of lo- 
cal landlords. During these proceedings, there was constant diplo- 
matic intercourse between the government of Nepal and the British 
East India Company and little desire on either side for open hostil- 
ities. The Gorkha generals, however, were quite confident in their 
ability to wage warfare in the mountains, and the company, with 



21 



Nepal and Bhutan: Country Studies 

its far greater resources, had little reason to give in to this aggres- 
sive state, which blocked commerce in the hills. After retreating 
before a reoccupation by company troops, Nepalese forces counter- 
attacked against police outposts in Butawal, killing eighteen police 
officers on April 22, 1814. The fragile state of Nepal was at war 
with the British Empire. 

At this stage in its history, Nepal's single major unifying force 
was the Gorkha-led army and its supply system. Prithvi Narayan 
Shah and his successors had done the best they could to borrow 
military techniques used by the British in India, including modern 
ordnance, command structures, and even uniforms. An entire mu- 
nitions and armaments industry had been created in the hills, based 
on locally mined and processed raw materials, and supported by 
a system of forced labor to transport commodities. The soldiers 
in the army were renowned for their ability to move relatively fast 
with their supplies and to fight with discipline under tough condi- 
tions. They also knew their terrain better than the British, who 
had little experience there. Although the Nepalese army of an es- 
timated 16,000 regulars would have to fight on a wide front, it had 
great logistical advantages and a large reservoir of labor to sup- 
port it. 

The initial British campaign was an attack on two fronts. In the 
eastern theater, two columns totaling about 10,000 troops were sup- 
posed to coordinate their attacks in the Makwanpur-Palpa area, 
but poor leadership and unfamiliarity with hill warfare caused the 
early collapse of these campaigns. In the west, another 10,000 troops 
in two columns were to converge on the forces of Amar Singh Tha- 
pa. One of the western columns failed miserably, but the main force 
under Ochterlony outmaneuvered the Nepalese army and defeat- 
ed General Thapa on May 9, 1815, leading to the complete loss 
of Kumaon by Nepal (see fig. 3). The Nepalese forces had already 
proved their abilities, so the British East India Company took no 
chances the next year, marshalling 35,000 men and more than 100 
artillery pieces under Ochterlony for a thrust toward Makwanpur. 
Simultaneous operations by the chogyal, or king, of Sikkim were 
driving the Nepalese army from the east. Major batdes before Mak- 
wanpur in late February 1816 resulted in the final defeat of Nepa- 
lese forces by early March. Diplomats had already begun preparing 
a peace treaty, which reached Ochterlony on March 5. 

The Anglo- Nepalese War (1814-16) was a total disaster for 
Nepal. According to the Treaty of Sagauli, signed in 1816, Nepal 
lost Sikkim, the territories west of the Kali River (Kumaon and 
Garhwal), and most of its lands in the Tarai. The British East In- 
dia Company was to pay 200,000 rupees (for value of the rupee — 



22 



Nepal: Historical Setting 



see Glossary) annually to Nepal to make up for the loss of revenues 
from the Tarai. Kathmandu was also forced to accept a British resi- 
dent, which was extremely disturbing to the government of Nepal 
because the presence of a resident had typically preceded outright 
British conquest throughout India. In effect, the treaty proved to 
be less damaging, for the company soon found the Tarai lands 
difficult to govern and returned some of them to Nepal later in 
1816, simultaneously abolishing the annual payments. The return 
of Tarai territory was important for the survival of Nepal because 
the government relied on the area as a source of land grants, and 
it is doubtful that the country as it was then run could have sur- 
vived without this source of endowments. The presence of the resi- 
dent, too, turned out to be less difficult than first imagined because 
all later governments in Kathmandu took stringent measures to 
isolate him by restricting his movements and keeping a close eye 
on the people he met. Nevertheless, the glory days of conquest were 
over, and Nepal had been squeezed into the boundaries it still had 
in the early 1990s. 

Infighting among Aristocratic Factions 

The Gorkha aristocracy had led Nepal into disaster on the in- 
ternational front but preserved the political unity of the country, 
which at the end of the Anglo-Nepalese War in 1816 had been a 
unified nation only about twenty-five years. The success of the cen- 
tral government rested in part on its ability to appoint and control 
regional administrators, who also were high officers in the army. 
In theory these officials had great local powers; in practice they 
spent little energy on the daily affairs of their subjects, interfering 
only when communities could not cope with problems or conflicts. 
Another reason for Gorkha success in uniting the country was the 
willingness to placate local leaders by preserving areas where former 
kings and communal assemblies continued to rule under the loose 
supervision of Kathmandu. This approach left substantial parts of 
the country out of the control of regional administrators. Even with- 
in the areas directly administered by the central government, 
agricultural lands were given away as jagir (see Glossary) to the 
armed services and as birta (see Glossary) to court favorites and 
retired servicemen. The holder of such grants in effect became the 
lord of the peasants working there, with little if any state interfer- 
ence. From the standpoint of the average cultivator, the govern- 
ment remained a distant force, and the main authority figure was 
the landlord, who took part of the harvest, or (especially in the 
Tarai) the tax collector, who was often a private individual con- 
tracted to extort money or crops in return for a share. For the leaders 



23 



Nepal and Bhutan: Country Studies 




Nepal: Historical Setting 



in the administration and the army, as military options became 
limited and alternative sources of employment grew very slowly, 
career advancement depended less on attention to local conditions 
than on loyalty to factions fighting at court. 

Prime Minister Bhimsen Thapa, in collusion with the queen re- 
gent, Tripurasundari, remained in power despite the defeat of 
Nepal. He faced constant opposition at court from factions cen- 
tered around leading members of other families, notably the Pandes, 
who decried what they felt was his craven submission to the Brit- 
ish. Bhimsen Thapa managed to keep his opposition under con- 
trol by maintaining a large army and modernizing its equipment 
and by convincing the suspicious British that he had no intention 
of using the army. During the minority of King Rajendra Bikram 
Shah (reigned 1816-47), the prime minister kept the king in 
isolation — he did not even have the freedom to leave the palace 
without permission. Bhimsen Thapa appointed members of his own 
family to the highest positions at court and in the army, giving 
his brother, Ranbir Singh Thapa, control over the western provinces 
and his nephew, Mathbar Singh Thapa, control over the eastern 
provinces. The Pandes and other opponents were frozen out of pow- 
er. Aside from the army and some attention to increasing trade, 
little effort could be expended on issues of national development. 

The power balance began to change after the king came of age 
and Queen Tripurasundari died in 1832. The prime minister lost 
his main support at a time when the young ruler was coming un- 
der greater influence from the Pande faction at court. In 1833 Bri- 
an Hodgson became British resident and began a more aggressive 
campaign to increase British influence and trading opportunities; 
because Bhimsen Thapa opposed him, Hodgson openly favored 
Bhimsen Thapa' s opponents. In 1837 the king announced his in- 
tention to rule independently, deprived both Bhimsen Thapa and 
Mathbar Singh of their military powers, and promoted some mem- 
bers of the Pande faction. Shortly afterward the youngest son of 
the elder queen died, and Bhimsen Thapa was arrested on a 
trumped up charge of poisoning the prince. All the property of the 
Thapas was confiscated. An eight-month trial led to an acquittal, 
but the Thapas were in disarray. When Rana Jang Pande, head 
of his family, became prime minister, he reimprisoned Bhimsen 
Thapa. The man who had ruled the country with an iron hand 
committed suicide in prison in August 1839. This series of events 
marked the end of the longest stable period in the early history of 
the Shah Dynasty of Nepal, dominated by the prime minister in 
the name of the king. 



25 



Nepal and Bhutan: Country Studies 

The fall of Bhimsen Thapa did nothing to solve the factional fight- 
ing at court. The Pandes were dismissed, and Fateh Jang Chau- 
taria was appointed prime minister in November 1840. His ministry 
was unable to control renewed competition between a resurgent 
Thapa coalition and the disgraced Pandes, who preferred the ab- 
dication of the king in favor of the heir apparent. The king be- 
came increasingly attentive to the advice of his wives. Under intense 
pressure from the aristocracy, the king decreed in January 1843 
that he would rule the country only with advice and agreement 
of his junior queen, Lakshmidevi, and commanded his subjects 
to obey her even over his own son, Surendra. The queen, seeking 
support of her own son's claims to the throne over those of Suren- 
dra, invited back from exile Mathbar Singh Thapa, who was popu- 
lar in army circles. Upon his arrival in Kathmandu, an investigation 
of his uncle's death took place, and a number of his Pande ene- 
mies were executed. By December 1843, Mathbar Singh was ap- 
pointed prime minister, but he proved no more capable of 
extinguishing court intrigues than had his predecessors. Against 
the wishes of the queen, he supported heir apparent Surendra. Once 
Mathbar Singh had alienated the person who officially wielded state 
authority, his days were numbered. On May 17, 1845, he was 
killed, most likely on the queen's orders. The assassin apparently 
was Jang Bahadur Kunwar, his nephew, then a minor but rising 
star in court politics. 

Rana Rule 

The death of Mathbar Singh set the stage for one of the crucial 
sequences of events in modern Nepalese history — the destruction 
of the old aristocracy and the establishment of a dictatorship of the 
prime minister. These events provided the long period of stability 
the country needed but at the cost of political and economic de- 
velopment. 

The Kot Massacre 

After three months of squabbling, a coalition ministry was formed 
in September 1845, again headed by Fateh Jang Chautaria. The 
real power behind the throne was the favorite of Queen Lakshmi- 
devi, Gagan Singh, who controlled seven regiments in the army 
compared to the three under the prime minister. Abhiman Singh 
and Jang Bahadur also served as commanders, each with three regi- 
ments. Plots and counterplots continued until Gagan Singh was 
found murdered during the night of September 14, 1846. The queen 
was beside herself at the death of her favorite, whom she had hoped 
to use to elevate her own son to the monarchy. She commanded 



26 



Nepal: Historical Setting 



Abhiman Singh to assemble the entire military and administra- 
tive establishment of Kathmandu immediately at the courtyard of 
the palace armory {hot). 

Emotions ran high among the assembled bands of notables 
and their followers, who listened to the queen give an emotional 
harangue blaming the Pandes and demanding that the prime 
minister execute the Pande leader whom she suspected of the mur- 
der. While Abhiman Singh hesitated, fighting broke out in the 
crowd, and he was wounded. During the free-for-all that followed, 
swords and knives were used on all sides to dispatch opponents. 
Through some scheme that has never been explained adequately, 
the only leader with organized bodies of troops in the hot area was 
Jang Bahadur, whose troops suppressed the fighting, killing many 
of his opponents in the process. When the struggle subsided, the 
courtyard was strewn with the bodies of dozens of leading nobles 
and an unknown number of their followers — the cream of the Nepa- 
lese aristocracy. The Pande and Thapa families in particular were 
devastated during this slaughter. 

Why the Kot Massacre took place has never been established, 
although the queen herself was obviously at fault for calling the 
assembly and whipping it into a frenzy. It has always seemed sus- 
picious that the king was notably absent when the fighting began 
and that Jang Bahadur was the only leader who was ready for trou- 
ble. The extent of the carnage was apparently unexpected. Jang 
Bahadur was the only true beneficiary of the massacre and became 
the only military leader in a position of strength in the capital. The 
next day, he became prime minister and immediately launched a 
purge that killed many of his aristocratic competitors and drove 
6,000 people into exile in India. 

The Dictatorship of Jang Bahadur 

History has not been kind to Jang Bahadur during the twen- 
tieth century. He was blamed for setting up a dictatorship that 
repressed the entire nation for more than 100 years and left it in 
a primitive economic condition. From the standpoint of the 
nineteenth century during which he lived, however, he was a pil- 
lar of strength who eliminated the useless factional fighting at court, 
introduced innovations into the bureaucracy and the judiciary, and 
made efforts to "modernize" Nepal. In this sense, he remains one 
of the most important figures in Nepalese history. 

Jang Bahadur Kunwar's early career paralleled that of many 
members of the lower aristocracy in Nepal, despite the Kunwar 
family's claims of descent from Indian princes. Jang Bahadur's 
great-grandfather was an important military leader under Prithvi 



27 



Nepal and Bhutan: Country Studies 

Narayan Shah in the eighteenth century, and during the war with 
China (1791-92) his grandfather was also a military leader, who 
became one of the four chief administrators (kaji) of the Gorkha- 
Nepalese state. His father, Bala Narasimha Kunwar, was in court 
the day Rana Bahadur Shah was murdered and killed the mur- 
derer on the spot. For this action, he was rewarded with the posi- 
tion of kaji, which was made hereditary in his family. Jang Bahadur 
joined the military service in 1832-33 at the age of sixteen. As 
maternal grandson of Bhimsen Thapa, he lost his job and his 
property when the latter fell. After wandering in northern India 
for several years, he returned to Nepal as a captain in the artillery 
in 1840. In November 1841, he was asked by the king to join his 
bodyguard, and in January 1842 he began work as kaji in the palace. 
When Mathbar Singh returned to power, Jang Bahadur rose with 
him but Mathbar Singh disliked his ambition and had him removed 
to a lesser position on the staff of the heir apparent. When Fateh 
Jang Chautaria came to power, Jang Bahadur became fourth in 
the hierarchy of the coalition government and took pains to flatter 
the queen while showing no signs of ambition to Gagan Singh. A 
career opportunist, he was ready and waiting when the time came 
to act at the Kot Massacre. 

Queen Rajendralakshmi was not pleased by the new prime 
minister. She conspired to eliminate Jang Bahadur and elevate her 
son to the throne. The Basnyat Conspiracy, so called because many 
of its participants belonged to one of the last leading noble fami- 
lies, the Basnyats, was betrayed, and its ringleaders were rounded 
up and executed in 1846. A meeting of leading notables packed 
with Rana supporters found the queen guilty of complicity in the 
plot, stripped her of her powers, and sent her into exile in Banaras 
along with King Rajendra. The king still had illusions of grandeur 
and began plotting his return from India. In 1847 Jang Bahadur 
informed the troops of the exiled king's treasonous activities, an- 
nounced his dethronement, and elevated Rajendra's son to the 
throne as Surendra Bikram Shah (1847-81). Rajendra was cap- 
tured later that year in the Tarai and brought back as a prisoner 
to Bhadgaon, where he spent the rest of his life under house arrest. 

By 1850 Jang Bahadur had eliminated or overawed all of his 
major rivals, installed his own candidate on the throne, appointed 
his brothers and cronies to all the important posts, and ensured 
that major administrative decisions were made by himself as prime 
minister. At this point, he took the unprecedented step of travel- 
ing to Britain, leaving from Calcutta in April 1850 and returning 
to Kathmandu in February 1851 . Although he unsuccessfully tried 
to deal directly with the British government while he was there, 



28 




Kathmandu Valley 
Courtesy Elsa Martz 

the main result of the tour was a great increase in goodwill between 
the British and Nepal. Recognizing the extent of the world and 
the power of industrialized Europe, he became convinced that close 
cooperation with the British was the best way to guarantee Nepal's 
independence. From then on, European architecture, fashion, and 
furnishings became more prevalent in Kathmandu and among the 
Nepalese aristocracy in general. 

As part of his modernization plans, Jang Bahadur commissioned 
leading administrators and interpreters of texts on dharma to re- 
vise and codify the legal system of the nation into a single body 
of laws, a process that had not been carried out since the seven- 
teenth century under Ram Shah of Gorkha. The result was the 
1 , 400-page Muluki Ain of 1854, a collection of administrative proce- 
dures and legal frameworks for interpreting civil and criminal mat- 
ters, revenue collection, landlord and peasant relations, intercaste 
disputes, and marriage and family law. In contrast to the older 
system, which had allowed execution or bodily mutilation for a wide 
range of offenses, the Muluki Ain severely limited — without 
abolishing — corporal punishment. For example, the old system gave 
wide scope for blood vengeance by aggrieved parties, such as cuck- 
olded husbands, but the Muluki Ain restricted such opportunities. 
Substitutions included confiscation of property or prison terms. 



29 



Nepal and Bhutan: Country Studies 

Torture to obtain confessions was abolished. Strict penalties were 
set down for the abusers of judicial positions and also for persons 
maliciously accusing judges of corruption. There were statutes of 
limitations for judicial actions. Caste-based differences in the degree 
of punishments remained throughout, with higher castes (for ex- 
ample, Brahmans) exempt from the corporal punishments and 
heavy fines that lower-caste members incurred for the same crimes. 
This distinction was in keeping with the traditional approach of 
the dharma shastras, or ancient legal treatises (see The Judicial Sys- 
tem, ch. 5). 

After his return from Europe, Jang Bahadur took steps to in- 
crease his hold over the country. He reduced the king to a prisoner 
in his own palace, surrounded by agents of the prime minister and 
restricted and supervised at all times. No one outside the king's 
immediate family could see the king without permission from the 
prime minister. All communications in the name of the king were 
censored, and he was allowed to read only approved literature. In 
1856 the king issued a royal decree (sanad) that formalized the 
dominance of the Kunwar family. There were three main provi- 
sions in this crucial document. First, the prime minister had com- 
plete authority over all internal administration, including civil, 
military, and judicial affairs, and all foreign relations, including 
the powers to make war and peace. Second, Jang Bahadur was 
made great king (maharajah) of Kaski and Lamjung districts, in 
effect serving as their independent ruler. The Shah king retained 
the title of maharajadhiraja (supreme king) and the right to use the 
honorific term shri five times with his name. The prime minister 
could use shri three times with his name. In this way, Jang Ba- 
hadur stopped short of taking the throne outright but elevated his 
family to a level second only to the royal house, which remained 
as a symbol of the nation. Finally, provisions were established for 
hereditary succession to the post of prime minister. Brothers and 
then sons would inherit the position in order of seniority. These 
provisions meant that the dictatorship of the Kunwar family, a vir- 
tual monarchy within the monarchy, would be passed down in the 
family for generations, with no legal mechanism for changing the 
government. Later, Jang Bahadur established official Rolls of Suc- 
cession that ranked all his descendants in relation to their heredi- 
tary rights to the office of prime minister. 

Jang Bahadur sealed the arrangement with the Shah Dynasty 
by arranging marriages between his heirs and the royal house. In 
1854 his eldest son, Jagat Jang (aged eight), married the eldest 
daughter (aged six) of Surendra Bikram Shah. In 1855 his second 
son married the second daughter of the king. The ultimate test was 



30 



Nepal: Historical Setting 



passed in 1857, when heir apparent Trilokya Bir Bikram married 
two daughters of Jang Bahadur. A son of this union ascended to 
the throne in 1881. 

Nepal began to experience some successes in international af- 
fairs during the tenure of Jang Bahadur. To the north, relations 
with Tibet had been mediated through China since Nepal's defeat 
in 1792, and during the early nineteenth century embassies had 
to make the arduous journey to Beijing every five years with local 
products as tribute to the Qing emperor. By 1854, however, Chi- 
na was in decline and had fallen into a protracted period of distur- 
bances, including the Taiping Rebellion (1851-64), revolts by 
Muslim ethnic groups north of Tibet, and war with European pow- 
ers. The Nepalese mission to Beijing in 1852, just after the death 
of the sixth Panchen Lama, was allegedly mistreated in Tibet. Be- 
cause of this slight, the Nepalese government sent a protest letter 
to Beijing and Lhasa outlining several grievances, including ex- 
cessive customs duties on Nepalese trade. In 1855 Nepalese troops 
overran the Kuti and Kairang areas. Hostilities lasted for about 
a year, with successes and failures on both sides, until a treaty 
negotiated by the Chinese resident and ratified in March 1856 gave 
Nepalese merchants duty-free trade privileges, forced Tibet to pay 
an annual tribute of 10,000 rupees to Nepal, and allowed a Nepa- 
lese resident in Lhasa. In return, Nepal gave up territorial gains 
and agreed that it, as well as Tibet, would remain a tributary state 
subject to China. As the Qing Empire disintegrated later in the 
century, this tributary status was allowed to lapse, and even Tibet 
began to shake off its subordination. 

The outbreak of disorder to the south also allowed the Nepalese 
army to take a more active role in international affairs. Beginning 
in May 1857, a series of related uprisings throughout north India — 
known as the Sepoy Rebellion — threatened to topple the power of 
the British East India Company. The uprisings began with wide- 
spread mutinies in the company's army and spread to include 
peasant revolts and alliances of the old Mughal aristocracy against 
the foreigners. Most of the major cities west of Bengal fell into reb- 
el hands, and the aged Mughal emperor was proclaimed the lead- 
er of a national revolution. Initially there was some fear in British 
circles that Nepal would side with the rebels and turn the tide 
irrevocably against the British East India Company, but Jang 
Bahadur proved to be a loyal and reliable ally. At that point, 
immediately following hostilities in Tibet, the army of Nepal had 
grown to around 25,000 troops. Jang Bahadur sent several columns 
ahead and then marched with 9,000 troops into northern India in 
December 1857. Heading an army of 15,000 troops, he fought 



31 



Nepal and Bhutan: Country Studies 

several hard battles and aided the British in their campaigns around 
Gorakhpur and Lucknow. The prime minister returned to Nepal 
triumphantly in March 1858 and continued to aid the British in 
rooting out 1 'rebels" who had been dislocated during the chaos 
and sought refuge in the Tarai. 

After the Sepoy Rebellion had been crushed and Britain had 
abolished the British East India Company and taken direct con- 
trol of India in 1858, Nepal received a reward for its loyalty. 
Western sections of the Tarai that had been ceded through the 
Treaty of Sagauli in 1816 were returned. Henceforth, the British 
were firm supporters of Jang Bahadur's government, and Nepal 
later became an important source of military recruits for the British 
army (see From the Anglo-Nepalese War to World War II, ch. 5). 

In 1858 King Surendra bestowed upon Jang Bahadur Kunwar 
the honorific title of Rana, an old title denoting martial glory used 
by Rajput princes in northern India. He then became Jang Ba- 
hadur Rana, and the later prime ministers descended from his 
family added his name to their own in honor of his accomplish- 
ments. Thus they all became "Jang Bahadur Ranas," and their 
line became known as the house of the Ranas. Jang Bahadur re- 
mained prime minister until 1877. suppressing conspiracies and 
local revolts and enjoying the fruits of his early successes. He ex- 
ercised almost unlimited power over internal affairs, taking for his 
own use whatever funds were available in the treasury. He lived 
in the high style of an Anglicized native prince in the British Raj, 
although unlike the Indian princes he was the ruler of a truly in- 
dependent nation, an ally rather than a subordinate of the British. 
He died as he had lived, a man of action, during a hunting expe- 
dition in the Tarai. 

The Rana Oligarchy 

After the death of Jang Bahadur, his eldest surviving brother, 
Ranoddip Singh, became prime minister (1877-85). Because he 
was childless, his term in office was full of plots by Jang Bahadur's 
sons and nephews over succession. These plots were complicated 
by the death of King Surendra Bikram Shah in 1881 and the royal 
accession of Prithvi Bir Bikram Shah (reigned 1881-1911) at the 
age of six. Finally, the doddering Ranoddip Singh was assassinat- 
ed, and Bir Shamsher, son of Jang Bahadur's youngest and closest 
brother, became prime minister (1885-1901). Bir Shamsher im- 
mediately launched a purge of his opponents. While in power, he 
brought piped water to the Kathmandu Valley, built a suspension 
bridge at Kulekhani, and set up a palace school where English was 
taught. His successor for three months was the progressive Dev 



32 



Nepal: Historical Setting 



Shamsher, who emancipated all female slaves, established a net- 
work of Nepali-language schools called Bhasa Pathsalas, and started 
the first Nepali-language newspaper, Gorkhapatra (Gorkha News- 
letter). A coalition of his brothers, upset with his radical tenden- 
cies, forced Dev Shamsher' s resignation and retirement to India. 

Chandra Shamsher took over (1901-29) and attempted to resolve 
the unending family feuds over succession rights by amending the 
Rolls of Succession that had originally been set up by Jang Ba- 
hadur. The modified Rolls of Succession contained three sched- 
ules: "A" class Ranas were the direct, legitimate offspring of Ranas, 
who could dine with any high-caste Chhetri family; "B" class Ranas 
usually were born of second wives and could take part in all forms 
of social interaction with high-caste Chhetris except the sharing 
of boiled rice; and "C" class Ranas were the offspring of wives 
and concubines of lower status with whom interdining was forbid- 
den. The "A" class Ranas could fill the highest positions in the 
army or civil administration, but "B" or "C" class Ranas at that 
time could only reach the level of colonels in the army aijid could 
never become prime ministers. At the time, this plan seemed ade- 
quate for finalizing everyone's position in the state and stopping 
conspiracy. In the long run, however, the rigid Rolls of Succes- 
sion alienated large numbers of aristocrats who saw little room for 
advancement in the Rana system, lost interest in preserving it, and 
even began opposing it. The alienation increased when Juddha 
Shamsher (in power 1932-45) removed all "C" class Ranas, in- 
cluding some of his own sons, from the swollen Rolls of Succes- 
sion and appointed many of them to administrative positions in 
districts far from the capital. In this way, the Rana dictatorship 
slowly created opposition within its own ranks. 

Prithvi Narayan Shah and his successors had used the older ad- 
ministrative systems of Gorkha and the kingdoms of the Kathmandu 
Valley to run the central government of a united Nepal that was 
in theory accountable to the king. Jang Bahadur had inherited con- 
trol over these systems and proceeded to undercut their power by 
packing them with his own officials or by establishing parallel offices 
that duplicated functions and, in effect, took over the work of older 
offices. There had always been an Assembly of Lords filled by lead- 
ing aristocrats, military leaders, administrators, or head priests. 
In the past, this assembly had met periodically to advise the king 
and make important decisions. Under Jang Bahadur and his suc- 
cessors, it was full of Ranas and their henchmen. Aside from the 
codification of the Muluki Ain, the assembly functioned as a rub- 
ber stamp for Rana decisions. Accounting procedures and records 
had been kept by an Office of Accounts, a State Treasury, and 



33 



Nepal and Bhutan: Country Studies 

a Land Revenue Office. Under Jang Bahadur, separate offices 
staffed by his appointees kept records of military grants, religious 
endowments, land revenue, treasury correspondence, and military 
correspondence — in other words, the most important components 
of the older royal administration. Special offices for the investiga- 
tion of corruption and for police matters (staffed by army person- 
nel) formed the core of a police state. There were few avenues open 
for government personnel to work outside of a network dominated 
by Rana interests; those who did could be detected and were either 
punished or coopted into the Rana system. The government of late 
nineteenth-century Nepal thus stripped the monarchy of any real 
power and maintained a late medieval administrative framework. 

Because their power was ultimately illegitimate, resting on the 
abdication of responsibilities by the king and his virtual incarcera- 
tion, the Ranas became expert at preventing any kind of challenge. 
In the process, they succeeded in isolating Nepal from many of 
the changes happening throughout the world and even in nearby 
India. 

The Ranas were not totally inactive during the period of dic- 
tatorship, however. On the legal front, suttee, or the suicide of a 
wife by throwing herself onto her husband's funeral pyre, was 
abolished in 1920, and slavery was abolished in 1929. Tri-Chandra 
College was established in 1918, and by the 1940s there were several 
high schools in the country and two Nepali literary magazines (see 
Education, ch. 2). The Ranas also attended to economic develop- 
ment by founding the Pharping Hydroelectric Company in 1911 
and establishing the Nepal Industrial Board, a jute mill, a match 
factory, two cotton mills, the Nepal Plywood and Bobbin Compa- 
ny, and several rice mills during the 1930s (see Industry, ch. 3). 
As for public health, the first tuberculosis clinic was set up in 1934. 
In view of the population of approximately 6 million in the 1930s, 
these accomplishments seem pitiful. Almost all Nepalese remained 
illiterate and uninformed about any part of the world outside their 
villages or, at best, their valleys. Public health and economic 
infrastructure had not advanced past medieval levels in most areas, 
and doing anything about it was proving impossible. Under Bhim 
Shamsher (reigned 1929-32), fifty people were arrested and fined 
for setting up a public library. 

Because the Ranas relied on the goodwill of the army and the 
British government to support their dictatorship, the army served 
as a legitimate — and perhaps the most viable — means for Nepa- 
lese citizens to achieve upward mobility or to see the world. Dur- 
ing World War 1(1914-18), the government of Nepal loaned more 
than 16,000 troops to the British, and 26,000 Nepalese citizens who 



34 



The gilded copper Sun 
Dhoka gate, built in 1753, 
in Durbar Square, 
at the medieval city 
of Bhaktapur. 
The gate, which is the 
entrance to the main 
courtyard palace and the 
Taleju Bhavani Temple, is 
flanked by a small shrine 
of the Rana period. 



Hanuman Dhoka Palace, 
the old royal palace, 
Kathmandu 
Courtesy Harvey Follender 



Nepal and Bhutan: Country Studies 

were part of British Indian regiments fought in France and the Mid- 
dle East. In gratitude the British government in 1919 bestowed on 
Nepal an annual payment of 1 million Indian rupees (US$476,000) 
in perpetuity and in 1920 transformed the British resident in Kath- 
mandu into an envoy. A Treaty of Perpetual Peace and Friend- 
ship signed in 1923 confirmed the independence of Nepal and its 
special relationship with British India. As long as British rule re- 
mained stable in India and the army offered a safety valve to release 
social pressures in Nepal, the Ranas were able to use their total 
control over internal affairs to isolate their country, a situation that 
could not long endure. 

The Growth of Political Parties 

The earliest opposition to the Rana regime that departed from 
the conspiratorial politics of the palace began during the rule of 
Chandra Shamsher, a conservative who was not interested in 
modern political participation, even though large numbers of Nepa- 
lese soldiers had been exposed to new ideas during and after World 
War I. Just after the war, Thakur Chandan Singh, a retired army 
officer, started two weekly newspapers in Kumaon, Tarun Gorkha 
(Young Gorkha) and Gorkha Samsar (Gorkha World) . At the same 
time, Devi Prasad Sapkota, a former officer in the Foreign Depart- 
ment, founded the weekly Gorkhali in Banaras. These journals were 
forums where Nepalese exiles could criticize the backwardness and 
repression of the Rana regime. During the 1930s, a debating soci- 
ety called Nagrik Adhikar Samiti (Citizen's Rights Committee) was 
founded in Kathmandu to discuss religious issues, but its discus- 
sions veered into politics. When one of its meetings featured a po- 
litical speech denouncing the Rana regime, the government banned 
the debating society. By 1935 the first Nepalese political party, the 
Praja Parishad (People's Council), began among Nepalese exiles 
and set up cells within the country. In Bihar it published a period- 
ical, Janata (The People), advocating a multicaste, democratic 
government and the overthrow of the Ranas. The Rana police 
managed to infiltrate the organization and arrested 500 persons 
in Kathmandu. Four leaders were executed (they continued to be 
commemorated as martyrs in 1991), and others received long pris- 
on terms, but the survivors escaped to India to carry on their polit- 
ical agitation. 

In India the British were having their own problems with an in- 
dependence movement headed by the Indian National Congress, 
led by Mohandas K. Gandhi and Jawaharlal Nehru. Under Gan- 
dhi's leadership, the Indian National Congress pursued nonviolent 
campaigns of civil disobedience that mobilized millions, including 



36 



Nepal: Historical Setting 



members of all castes and women, into agitations for reform and 
the end of foreign rule. Simultaneously, there was a growth in ter- 
rorism and police repression that seriously destabilized all of South 
Asia. Lacking a British promise of independence, the Indian Na- 
tional Congress opposed participation in World War II (1939-45), 
but even with many of its leaders in jail during the war there was 
continuing public disorder and police violence. After the war end- 
ed, the British realized that their position in South Asia had be- 
come untenable, and they prepared to leave. With China in the 
middle of a communist revolution, their old allies the British prepar- 
ing to leave India, and thousands of soldiers returning from abroad, 
the Rana government could no longer avoid making radical changes 
in Nepal. 

Many of the Nepalese exiles in India had worked closely with 
the Indian National Congress during its struggles with the Brit- 
ish, realizing that only after the elimination of its colonial support 
would the Rana regime fall. In Banaras in October 1946, a group 
of middle-class Nepalese exiles formed the All-India Nepali Na- 
tional Congress (Akhil Bharatiya Nepali Rashtriya Congress). 
Many of its members were students who had agitated and subse- 
quently had been jailed during movements in India. During its 
council in Calcutta in January 1947, the new organization dropped 
its "All-India" prefix and merged with two other groups, the Nepali 
Sangh (Nepalese Society) of Banaras and the Gorkha Congress of 
Calcutta, which had closer connections with lower-class Ranas. The 
Nepali National Congress (Nepali Rashtriya Congress) was offi- 
cially dedicated to the ouster of the Rana dictatorship by peaceful 
means and to the establishment of democratic socialism. One of 
its first mass actions was participation in a labor strike in the jute 
mills of Biratnagar in the Tarai; the strike disrupted traffic at the 
Indian railhead in Jogbani and required army intervention. 
Although this action garnered much publicity for the party and 
brought thousands of protesters into the streets even in Kathman- 
du, the strike was suppressed, and its leaders, including Bishwesh- 
war Prasad (B.P.) Koirala, were imprisoned. 

B.P. Koirala (1914-82) became the leader most closely identi- 
fied with the Nepali National Congress. His father, a Brahman 
businessman, spent a good deal of time in Bihar and Bengal. He 
had become involved with political activists and progressive ideas, 
especially those of Gandhi, and participated in anti-Rana agita- 
tions including the publication of Gorkhali at Banaras. B.P. Koirala 
thus grew up in an atmosphere oriented toward radical Gandhian 
action. By 1937 he was studying law in Calcutta and had started 
working for the Congress Socialist Party. He was arrested in India 



37 



Nepal and Bhutan: Country Studies 

a number of times and spent 1942 to 1945 in jail after instigating 
Nepalese soldiers to rebel against the government. His views dur- 
ing his early years, influenced by Gandhi, tended toward radical 
democratic decentralization and included cottage industries instead 
of large factories as models for economic development. His wing 
of the Nepali National Congress stressed nonviolent confrontation 
and general strikes, but he was not opposed to force should all other 
paths prove ineffective. He advocated a constitutional monarchy 
as a transitional political form for Nepal. 

The strong-willed, conservative Juddha Shamsher resigned as 
prime minister in November 1945, passing on his job to Padma 
Shamsher, who announced that he was a servant of the nation who 
would liberalize the Rana regime. Padma Shamsher' s repression 
of the Biratnagar strike, however, showed that he was not interested 
in the kind of political and labor reforms advocated by the Con- 
gress. In the aftermath of the repression, on May 16, 1947, he 
delivered a speech outlining important reforms, including the es- 
tablishment of an independent judiciary, elections for municipali- 
ty and district boards, expansion of education, publication of the 
national budget, and the formation of a special committee to con- 
sider plans for further liberalization. The Nepali National Con- 
gress called off its continuing agitations, and B.P. Koirala and other 
top leaders were released from detention in August. In January 
1948, the prime minister announced the first constitution of Nepal, 
which set up a bicameral Parliament, a separate High Court, and 
an executive power vested in the prime minister who was to be 
assisted by a five-member Council of Ministers. Although this con- 
stitution reserved almost all powers for the executive branch and 
kept the same rules of succession as before for both king and prime 
minister, the Nepali National Congress agreed to function within 
its framework. Beset by conflicting forces from all sides, however, 
Padma Shamsher resigned his position in early 1948. 

The Return of the King 

When the arch-conservative Mohan Shamsher took over as prime 
minister in 1948, he quickly outlawed the Nepali National Con- 
gress and showed no interest in implementing the new constitu- 
tion that was scheduled to take effect in April. He rejected the more 
progressive wing among the Rana aristocracy, leading several well- 
known opponents to found the Nepal Democratic Congress (Nepal 
Prajatantrik Congress) in Calcutta in August 1948. This group was 
well funded and publicly advocated the overthrow of the Ranas 
by any means, including armed insurrection. It tried to foment 
army coups in January 1949 and January 1950 but failed. When 



38 



Ruins of the Thyangboche Monastery, Khumbu, 
destroyed by fire in January 1989 
Courtesy Janet MacDonald 

the Rana government arrested B.P. Koirala and other organizers 
in October 1948 and subjected regime opponents to harsh condi- 
tions and even torture in jail, its democratic opponents turned 
against it again. Even the release of B.P. Koirala in June at the 
insistence of Indian political leaders did little to help the negative 
political climate. When Mohan Shamsher convened Parliament in 
September 1950, supposedly in keeping with the constitution, it 
was so full of Rana appointees that no one in the opposition took 
the legislature seriously. The Nepali National Congress absorbed 
the Nepal Democratic Congress in March 1950 and became the 
Nepali Congress Party, and it formally decided to wage an armed 
struggle against the Rana regime. On November 6, King Trib- 
huvan Bir Bikram Shah, who had long been making anti-Rana 
statements, escaped from the palace and sought asylum in the In- 
dian embassy in Kathmandu. Armed attacks by 300 members of 
the Nepali Congress Party's Liberation Army (Mukti Sena) be- 
gan in the Tarai on November 11, initiating revolution in Nepal. 

Mohan Shamsher found himself in a very unfavorable interna- 
tional climate. The British had left India in 1947, and in their place 
was a democratic government dominated by the Indian National 
Congress, led by Jawaharlal Nehru. The government of India had 



39 



Nepal and Bhutan: Country Studies 

no interest in preserving the autocratic rule of native princes and 
had forcibly taken over the lands of the few princes who had op- 
posed union with the new India. Furthermore, members of the un- 
derground Nepalese opposition had helped their Indian colleagues 
during the struggle against the British. B.P. Koirala had met with 
Nehru and with Gandhi as well. Changes in the north added an 
element of power politics to the situation. The Chinese revolution 
had ended in 1949 with the victory of the Chinese Communist 
Party, ending 100 years of weakness. Tibet again came under Chi- 
na's control in 1950. India, faced with an expansive military pow- 
er operating under a radically different political philosophy on its 
long northern borders, could not afford a destabilized Nepal. Thus, 
the king was assured of asylum in the Indian embassy, and the 
Liberation Army of the Nepali Congress Party was able to oper- 
ate freely from bases along the Indian border with Nepal. 

The revolution consisted of scattered fighting, mosdy in the Tarai, 
and growing demonstrations in the towns of the hills. The initial 
strategy of the insurgents was to capture the rich Tarai area, which 
produced much of the country's grain. Rebels were able to cap- 
ture several towns there but never were able to hold them against 
counterattacks by the army. Armed struggles did not develop in 
the Kathmandu Valley, but demonstrations of up to 50,000 peo- 
ple demanding the return of the king occurred in late November. 
Meanwhile, insurgents were infiltrating hill areas in the west and 
the east, where army operations were more difficult. After several 
weeks of growing demonstrations and dissension in the ranks of 
local commanders, Palpa fell from government control on Janu- 
ary 6, 1951. Rebels took over in Pokhara for a day on January 
9-10 and occupied Gorkha for part of January 10. Sporadic fight- 
ing in western Nepal led to the fall of many towns in mid-January. 
By this time, some "C" class Rana officers had resigned their com- 
missions in protest, and troops were beginning to surrender to the 
rebels. 

Negotiations between the Indian government and the Ranas had 
begun on December 24, 1950, in Delhi, finally leading to a procla- 
mation on January 8, 1951, by Mohan Shamsher, who promised 
restoration of the king, amnesty for all political prisoners, and elec- 
tions based on adult suffrage no later than 1952. The king formal- 
ly agreed two days later, and a cease-fire went into effect on January 
16. Further negotiations among the Ranas, the king, and the Nepali 
Congress Party produced an interim ministry headed by Mohan 
Shamsher with five Ranas and five Nepali Congress Party mem- 
bers. The king returned to Kathmandu, and the new ministry was 
sworn in during February 1951. 



40 



Nepal: Historical Setting 



The coalition ministry was a mixture of ultra-conservatives who 
believed that they were born to rule and radical reformers who had 
almost no administrative experience. It was able to enact a new 
interim constitution in March 1951, set up a separate judicial 
branch, transfer all executive powers back to the king (including 
supreme command of the armed forces and power to appoint 
government officials and manage finances), call for a welfare state, 
set forth a Bill of Rights, and start procedures for the formation 
of local-level assemblies, or panchayat (see Glossary). The ministry 
started plans to abolish birta lands used by Ranas to reward their 
own family members, eliminated bonded labor, and established 
a women's college and a radio station. The ministry was beset by 
law and order problems caused by loose bands of Liberation Army 
fighters who had refused to stop fighting, bands of robbers who 
were victimizing the Tarai, and ultra-conservative conspiracies that 
instigated a mob attack on the house of B.P. Koirala, who had be- 
come the minister of home affairs in April. The final embarrass- 
ment occurred when police fired on a student demonstration and 
killed a student. The entire bloc of Nepali Congress Party ministers 
resigned in November, which allowed the king to appoint a new 
government for the first time since the nineteenth century. The 
king used the opportunity to exclude for good the conservative Rana 
power bloc. A royal proclamation on November 16, 1951, estab- 
lished a new government led by Matrika Prasad (M.P.) Koirala, 
the half-brother of B.P. Koirala, who had run the Nepali Congress 
Party during the revolutionary struggle. 

The Democratic Experiment 

In the early 1950s, a political style appeared that characterized 
much of the era after the overthrow of the Ranas. On one side stood 
the king, who controlled the most powerful force in the nation — 
the army — and found it an increasingly useful tool with which to 
wield his prestige and constitutional authority. On the other side 
stood the political parties. First there was the Nepali Congress Party, 
which claimed to stand for the democratic will of the people. Then 
there were a multitude of breakaway factions or other small par- 
ties representing a wide range of interests. The Communist Party 
of Nepal, for example, was established in Calcutta in 1949 but had 
refused to take part in the armed struggle and condemned it as 
a "bourgeois" revolution; despite its own difficulties with factional 
disputes, this party was destined to grow in a country riddled with 
problems. In the Kathmandu Valley, other leaders who had been 
locked out of high positions in the first coalition government formed 
a revitalized Praja Parishad. Opponents of the "antidemocratic" 



41 



Nepal and Bhutan: Country Studies 

character of the Nepali Congress leadership and their pro-India 
stance, which they claimed went against the interests of Nepal, broke 
away to form a revitalized Nepali National Congress. In 1951 a 
united front of the communists and the Praja Parishad formed to 
oppose the Nepali Congress ministers. The political themes in the 
early 1950s — class, opposition to authoritarian trends within party 
leadership, and nationalistic propaganda, combined with agitational 
united front tactics — have remained standard features of party po- 
litics in Nepal. As the various political parties slashed at each other 
and the king maneuvered for greater power, the country began 
experimenting with a limping democracy. 

Nepal faced an enormous task. When the Ranas fell, only 2 per- 
cent of the adult population was literate, the infant mortality rate 
was more than 60 percent, and average life expectancy was thirty- 
five years. Less than 1 percent of the population was engaged in 
modern industrial occupations, and 85 percent of employment and 
income came from agriculture, mostly performed by tenants us- 
ing archaic methods and working under uncertain contracts. There 
were only approximately 100 kilometers of railroad tracks and a 
few kilometers of paved roads in the entire nation. Telephones, 
electricity, and postal services combined served only 1 percent of 
the population and only in certain pockets. Nepalese currency cir- 
culated only in and around the Kathmandu Valley. Government 
expenditures went almost entirely for salaries and benefits for army, 
police, and civil servants, with any savings going to the prime 
minister. Health and education received less than 1 percent of the 
government's expenditures. The nation still contained autonomous 
principalities (rajyd) based on deals with former local kings, and 
landlords acted as small dictators on their own lands. Caste, eth- 
nic, and linguistic differences abounded, but only three groups — 
Chhetris, Brahmans, and some Newars — had any say in the na- 
tional government. The Tarai, the richest area in the nation, had 
been systematically ignored by the government and exploited for 
200 years, and many of its people felt more at home in India than 
Nepal. National integration was a major problem. 

Between November 1951 and February 1959, there was a suc- 
cession of short-lived governments ruling under terms of the in- 
terim constitution or under the direct command of the king, 
attempting to fashion an environment favorable for the calling of 
a constituent assembly that would frame a permanent constitution. 
As soon as the king found a ministry uncooperative or so beset by 
contradictions that it could not function, he replaced it with mem- 
bers who had smaller bases of support. At no time during this 
period did the faction of the Nepali Congress Party headed by B.P. 



42 



Nepal: Historical Setting 



Koirala, which commanded the widest allegiance, have any chance 
of forming a government because the king continued to postpone 
elections for an assembly. 

When King Tribhuvan died, his son Mahendra Bir Bikram Shah 
Dev (reigned 1955-72) carried on as before, experimenting with 
types of councils or ministries that would do his will behind a 
democratic facade. Under pressure from large-scale civil disobe- 
dience campaigns, the king announced that elections for a represen- 
tative assembly would take place on February 18, 1959. As political 
parties of all persuasions were busily preparing for the elections, 
the king had his own commission draw up a new constitution. He 
presented it as a gift to the nation on February 12, 1959, with the 
elections only one week away. In the first national elections in the 
history of the nation, the Nepali Congress won a clear victory, tak- 
ing 74 out of 109 seats. B.P. Koirala at last became prime minister. 

Under the terms of the new constitution, there were two legisla- 
tive houses: an Upper House (Maha Sabha) of 36 members, half 
elected by the lower house and half nominated by the king; and 
a Lower House (Pratinidhi Sabha) of 109 members, all elected by 
universal adult suffrage. The leader of the majority party in the 
Lower House became prime minister and governed with a cabi- 
net of ministers. The king could act without consulting the prime 
minister, and even could dismiss him. The king also had control 
over the army and foreign affairs and could invoke emergency pow- 
ers suspending all or part of the constitution. 

Against this background of formidable royal rights, the Koirala 
government was able to accomplish some major tasks. It finally 
abolished birta tenure in October 1959 and the autonomy of prin- 
cipalities (rajya) in the western hills. In 1960 the government re- 
vised a crucial Trade and Transit Treaty with India. It also 
negotiated another agreement with India on the Gandak River 
Project, guaranteeing territorial jurisdiction and free provision of 
water to Nepal (see Relations with India, ch. 4). Diplomatic rela- 
tions were established with the United States, the Soviet Union, 
China, France, and Pakistan. Koirala himself addressed the United 
Nations, visited China, and presided over the signing of a Treaty 
of Peace and Friendship with China in 1960. In the economic 
sphere, the First Five- Year Plan (1956-61) had been poorly con- 
ceived and executed, but the Koirala government took steps to plan 
effectively for the Second Plan (1962-65). 

The king initially was on good terms with the Koirala govern- 
ment, even taking the unprecedented step of playing soccer with 
his brothers at the National Stadium against a team that included 
the prime minister and his associates. At the same time, he was 



43 



Nepal and Bhutan: Country Studies 

publicly opposed to democracy in principle and would not tolerate 
any official interference in the divine powers believed to be con- 
ferred on him as king. The army, the former aristocracy, conser- 
vative landowning groups, and the king all were uneasy about the 
reforms of the Koirala government and the negative propaganda 
of opposition groups inside Parliament, including the Gorkha 
Parishad and the Communist Party of Nepal. When destabilizing 
the Nepali Congress ministry proved difficult, the king used the 
nation's chronic violence — widely believed to be orchestrated by 
the monarch himself — as a reason to act directly. On December 
15, 1960, with the army's support and with little warning, the king 
used his emergency powers to dismiss the cabinet and arrest its 
leaders on the charge that they had failed to provide national leader- 
ship or maintain law and order. B.P. Koirala spent the next eight 
years in prison and another eight years in exile. The experiments 
in liberal socialism and democracy, at least as defined by the Nepali 
Congress, were at an end. 

The Panchayat System under King Mahendra 

On December 26, 1961, King Mahendra appointed a council 
of five ministers to help run the administration. Several weeks later, 
political parties were declared illegal. At first the Nepali Congress 
leadership propounded a nonviolent struggle against the new order 
and formed alliances with several political parties, including the 
Gorkha Parishad and the United Democratic Party, which had been 
strong critics of the Nepali Congress when it ran the government. 
Early in 1961, however, the king had set up a committee of four 
officials from the Central Secretariat to recommend changes in the 
constitution that would abolish political parties and substitute a 
"National Guidance" system based on local panchayat led directly 
by the king. By late 1961 , violent actions organized by the Nepali 
Congress in exile began along the Indian border, increasing in size 
and number during early 1962. 

The political situation changed completely when war broke out 
between India and China on October 20, 1962. In a series of rapid 
movements, Chinese troops occupied mountain areas east and west 
of Nepal in an attempt to resolve border disputes with India by sim- 
ply occupying disputed territories. The reversal suffered by Indian 
forces took the leadership in India by surprise and forced it to 
reevaluate the strategic situation in the Himalayas. Because India 
needed strong friends rather than insurrections in the region, it 
withdrew support from insurgents along the border with Nepal and 
established closer relations with the king's government. In Nepal, 
King Mahendra extended the state of emergency indefmitely. The 



44 



The twelve-armed Black Bhairav at Kathmandu is 
admired and revered as a form of Shiva. 

Courtesy Harvey Follender 



45 



Nepal and Bhutan: Country Studies 

army trained by India during the 1950s proved itself capable of 
handling guerrilla warfare. In the midst of increasing desertions 
from his cause, the leader of the Nepali Congress, Subarna Sham- 
sher, called off the armed struggle. 

Adopted on the second anniversary of the royal coup, the new 
constitution of December 16, 1962, created a four- tier panchayat 
system. At the local level, there were 4,000 village assemblies (gaun 
sabhd) electing nine members of the village panchayat, who in turn 
elected a mayor (sabhapati). Each village panchayat sent a member 
to sit on one of seventy-five district (zilld) panchayat, representing 
from forty to seventy villages; one-third of the members of these 
assemblies were chosen by the town panchayat. Members of the dis- 
trict panchayat elected representatives to fourteen zone assemblies 
(anchal sahhd) functioning as electoral colleges for the National Pan- 
chayat, or Rashtriya Panchayat, in Kathmandu. In addition, there 
were class organizations at village, district, and zonal levels for 
peasants, youth, women, elders, laborers, and ex- soldiers, who 
elected their own representatives to assemblies. The National Pan- 
chayat of about ninety members could not criticize the royal govern- 
ment, debate the principles of partyless democracy, introduce 
budgetary bills without royal approval, or enact bills without ap- 
proval of the king. Mahendra was supreme commander of the 
armed forces, appointed (and had the power to remove) members 
of the Supreme Court, appointed the Public Service Commission 
to oversee the civil service, and could change any judicial decision 
or amend the constitution at any time. To many of the unlettered 
citizens of the country, the king was a spiritual force as well, 
representing the god Vishnu upholding dharma on earth. Within 
a span often years, the king had, in effect, reclaimed the unlimit- 
ed power exercised by Prithvi Narayan Shah in the eighteenth 
century. 

The first elections to the National Panchayat took place in March 
and April 1963. Although political parties officially were banned 
and the major opposition parties publicly refused to participate, 
about one-third of the members of the legislative were associated 
with the Nepali Congress. Support of the king by the army and 
the government bureaucracy prevented opposition to his rule from 
developing within the panchayat system. Real power came from the 
king's secretariat, and in the countryside influence rested in the 
offices of zonal commissioners and their official staffs or the parallel 
system of development officers. The Nepali Congress leadership 
made increasingly conciliatory statements and began to announce 
its faith in democratic ideals under the leadership of the king. In 
1968 the king began to release political prisoners, including B.P. 



46 



Nepal: Historical Setting 



Koirala, who was freed on October 30. At this point, a three-way 
split developed in the Nepali Congress. B.P. Koirala went to In- 
dia, where he headed a wing committed to democratic revolution 
and violent overthrow of the panchayat system. He was a symbol 
for youth but powerless politically. Subarna Shamsher's wing con- 
tinued to advocate local cooperation with the king outside the pan- 
chayat system. A third wing tried to work within the panchayat system 
in the expectation that it would evolve into a democratic system. 
The disunity of the political opposition left King Mahendra to do 
as he wished. 

Under the direct leadership of the king, the government im- 
plemented some of the major projects that were initiated under the 
previous democratic regime and oversaw further steps toward the 
development of the country (see Constitutional Development, ch. 
4). Land reforms led to the confiscation of large Rana estates. Rajya 
reform abolished special privileges of some aristocratic elites in 
western Nepal. A new legal code promulgated in 1963 replaced 
the Muluki Ain of 1854. A major land reform program launched 
in 1964 essentially was a failure. The new panchayat system managed 
to bring 50,000 to 60,000 people into a single system of represen- 
tative government in a way that had been rendered impossible for 
the elite-based political parties. Nepal was able to carry out its sec- 
ond plan (1962-65) and third plan (1965-70), and to begin the 
Fourth Five- Year Plan (1970-75). Eradication of malaria, construc- 
tion of the Mahendra Highway, or East-West Highway, along the 
southern foot of the hills, and land settlement programs contribut- 
ed to a massive movement of population from the hills into the 
Tarai, resulting in a large increase in the area devoted to agricul- 
ture (see Population, ch. 2; Agriculture, ch. 3). 

The death of Mahendra in January 1972 and the accession of 
Birendra Bir Bikram Shah Dev allowed the possibility of turmoil. 
The new king was associated with young, educated, administra- 
tive experts who were dedicated to economic development, but not 
to sharing power with political parties. Students at Tribhuvan 
University went on an indefinite strike in August to support a ten- 
point charter of demands. That month, 100 armed men attacked 
an eastern Tarai village and killed a constable in a revolutionary 
action supposedly linked to the policies of B.P. Koirala. In June 
1973, terrorists hijacked a Royal Nepal Airlines airplane to India 
and escaped with 30 million Indian rupees (approximately US$4.6 
million). Other armed attacks and assassination attempts occurred 
into 1974. These isolated incidents had relatively little impact on 
a government that the army and the bureaucracy supported and 



47 



Nepal and Bhutan: Country Studies 

that monopolized the allocation of all resources to local develop- 
ment projects. 

In 1975 the king appointed a seven-member Reform Commis- 
sion to investigate making changes in the panchayat system, but dur- 
ing that year Indian prime minister Indira Gandhi declared a state 
of emergency in her country, jailing members of the opposition 
and curtailing democracy there. In this climate, the recommenda- 
tions of the Reform Commission in Nepal led to a 1975 constitu- 
tional amendment that made cosmetic changes in the panchayat 
system but only increased its rigidity. The changes included the 
establishment of five development regions to promote planning and 
the increase in membership of the National Panchayat from 90 to 
134 persons. The king was to nominate 20 percent of its members. 

Modernization under King Birendra 

When it became apparent that the panchayat system was going 
to endure, B.P. Koirala and other political exiles began to tone 
down their revolutionary rhetoric and advocate a reconciliation with 
the king. On December 30, 1976, Koirala and his close associate, 
Ganeshman Singh, flew to Kathmandu hoping to "make a fresh 
attempt." They were arrested for antinational activities and vio- 
lence, and a tribunal was set up for a trial. After considerable agi- 
tation, Koirala was released in June 1977 because of ill health. He 
met briefly with the king and then went to the United States for 
treatment. When he returned to Nepal in November 1977, he was 
again arrested at the airport. After further public agitations on his 
behalf, he underwent five treason trials in early 1978 and was ulti- 
mately acquitted. Thereafter, despite factional splits, the Nepali 
Congress resembled other opposition parties in its acceptance of 
the king's power. Thus, the pattern of modern Nepalese politics 
was established — loyalty to the king and opposition to his govern- 
ment. In practice, there were continuing student demonstrations 
against the panchayat system and for human rights in 1977 and 1978. 

On May 24, 1979, King Birendra announced on Radio Nepal 
that there would be a national referendum in the near future, dur- 
ing which the people could decide to support or reject the panchayat 
system of government. This referendum represented the first time 
in modern history that the monarch had publicly consulted his sub- 
jects. Political freedom was allowed to all citizens during the peri- 
od of preparation for the referendum, and there was intense 
realignment of political factions inside and outside the panchayat 
system. Finally, on May 2, 1980, out of a potential 7.2 million 
voters, 4.8 million cast their ballots. The outcome supported the 
panchayat system, with 54.7 percent for and 45.3 percent against 



48 



Ghats along the Hanumante River in Bhaktapur, a place to bathe and wash 

Courtesy Ann Matles 

it. Koirala and the Nepali Congress accepted the results. Although 
the referendum was a victory for the king, its narrow margin clearly 
indicated the need for change. Accordingly, the king quickly con- 
firmed freedom of speech and political activity and announced the 
formation of an eleven-member Constitution Reforms Commis- 
sion. The result, in December 1980, was the Third Amendment 
of the 1962 constitution, setting up direct elections to the National 
Panchayat, which would then submit a single candidate for prime 
minister to the king for approval. A Council of Ministers would 
thenceforth be responsible to the National Panchayat, not to the 
king. 

In March 1981, the Constitution Reforms Commission an- 
nounced that elections to the National Panchayat would take place 
on May 9, 1981 . Aside from pro-Moscow factions of the Communist 
Party of Nepal and a "Group of 38" from the Nepali Congress, 
political parties rejected the amended constitution and refused to 
participate in the elections. The Nepali Congress led by Koirala 
observed an "election boycott week" from May 1 to 8, but on elec- 
tion day a 52 percent turnout of voters chose 111 representatives 
to the National Panchayat. Surya Bahadur Thapa was returned 
as prime minister, and the king formed a twenty-eight-member 
Council of Ministers in June 1981. 



49 



Nepal and Bhutan: Country Studies 

Opposition politics were in a state of disarray, dominated by the 
terminal illness of Koirala, who died in July 1982. The victory of 
the king was not complete, however. During the elections, more 
than 70 percent of the candidates favored by the king lost. The 
panchayat system, a major source for local patronage, was becom- 
ing the stage for factional fights and shuffling coalitions. On many 
college campuses, elections for student unions went to communists 
after violent clashes. 

The trend toward factionalism in the National Panchayat inten- 
sified in 1983, when a serious food crisis and charges of corrup- 
tion caused the fall of Surya Bahadur Thapa's government. 
Lokendra Bahadur Chand took over as prime minister, but two 
blocs, or samuha (see Glossary), had emerged in the National Pan- 
chayat around Thapa and Chand. The factional fighting did not 
prevent the celebration in 1986 of the panchayat system's twenty- 
fifth anniversary, which created an opportunity for the second 
general election to the National Panchayat. The Nepali Congress 
and most other opposition parties again boycotted the elections, 
although the communists and a few other small parties did partic- 
ipate. The elections drew 60 percent of the voters, and 60 percent 
of the members of the National Panchayat supported Marich Man 
Singh Shrestha as prime minister. 

Before elections to the local panchayat the following year, the Nepa- 
li Congress announced that it would continue its boycott but then 
changed its strategy and allowed its members to run for local seats, 
claiming that it could ''capture the outposts" of the system and 
politicize the people. The poor showing of the Nepali Congress can- 
didates embarrassed the party, however, and revealed its isolation 
from many rural voters. 

Despite low growth figures, throughout the 1980s Nepal at least 
had made some progress in economic development, but it remained 
in any case one of the poorest countries in the world (see Econom- 
ic Setting, ch. 3). The king was achieving a higher profile in inter- 
national affairs, canvassing widespread support for the declaration 
of Nepal as a zone of peace and participating in the South Asian 
Association for Regional Cooperation (SAARC — see Glossary; In- 
ternational and Regional Organizations, ch. 4). These modest 
trends encountered a sudden interruption in 1989 when a major 
international incident with India occurred. On March 1, the Indi- 
an embassy announced that trade and transit treaties with Nepal, 
renewed regularly since the 1950s, would expire twenty-two days 
later. Both the Indian and Nepalese governments accused each other 
of delaying negotiations. When March 23 arrived, India declared 
the treaties had expired and closed all but two border entry points 



50 



Nepal: Historical Setting 



into Nepal. These closures caused huge backups on the border and 
delayed or halted the bulk of foreign trade, including crucial ship- 
ments of oil and gasoline, and the tourist trade, a major source 
of foreign exchange carefully cultivated under King Birendra. 
Agricultural production declined, layoffs in factories increased, and 
the inflation rate in 1987-88 rose to 11 percent. The growth rate 
of the economy, a healthy 9.7 percent in 1987-88, declined to 1.5 
percent in 1988-89. 

The Nepali Congress, early in its history accused of bowing to 
Indian opinion, in September organized a National Awakening 
Week during which 3,500 party members committed nonviolent 
civil disobedience. Student demonstrations against India began to 
take on antigovernment tones, and all campuses in Kathmandu 
closed for two months. The crisis demonstrated the fragility of the 
political and economic system in Nepal — an old culture but a young 
nation — landlocked between two giants and directed by a medieval 
monarchy. 

* * * 

The most complete and readable account of ancient and medieval 
Nepalese history in English is Mary Shephers Slusser's Nepal Man- 
dala, which also contains an excellent bibliography of the consider- 
able work available only in Nepali. Luciano Petech's Medieval History 
of Nepal (ca. 750-1480) contains interesting details and summarizes 
information in a quite readable manner. Dilli Raman Regmi'sAn- 
cient Nepal and Medieval Nepal are exhaustive accounts with large 
amounts of original material. 

Ludwig Stiller describes the period of the Gorkha conquests and 
the consolidation of the Nepalese state in the early eighteenth cen- 
tury in The Rise of the House of Gorkha and The Silent Cry. John Pem- 
ble presents a straightforward analysis of the Anglo-Nepalese War 
in The Invasion of Nepal. 

For relations between the British and Nepal later in the nineteenth 
century, see Ravuri Dhanalaxmi's British Attitude to Nepal's Rela- 
tions with Tibet and China, 1814-1914, Sushila Tyagi's Indo-Nepalese 
Relations (1858-1914), or Kanchanmoy Mojumdar's Anglo-Nepalese 
Relations in the Nineteenth Century. Affairs of the Ranas in the late 
nineteenth century are covered in M.S. Jain's Emergence of a New 
Aristocracy in Nepal (1837-58), Krishna Kant Adhikari's Nepal un- 
der Jang Bahadur, 1846-1877, and Satish Kumar's Rana Polity in 
Nepal. 

There is no shortage of books on the fall of the Rana regime 
and the political changes that led to the king's dominance by 1980. 



51 



Nepal and Bhutan: Country Studies 

Leo E. Rose has written books on his own, including Nepal: Strate- 
gy for Survival, as well as those with other authors, including the 
introductory Nepal: Profile of a Himalayan Kingdom (with John T. 
Scholz), The Politics of Nepal (with Margaret W. Fisher), and 
Democratic Innovations in Nepal (with Bhuwan Lai Joshi). 

There also are a number of works that describe recent develop- 
ments from several Nepalese perspectives, including Shashi P. Mis- 
ra's B.P. Koirala: A Case Study in Third World Democratic Leadership 
and Parmanand's The Nepali Congress since Its Inception. Hem 
Narayan Agrawal gives a straightforward presentation of the 
modern constitutions in Nepal: A Study in Constitutional Change. For 
current events, the short annual country profiles of Nepal in Febru- 
ary issues of Asian Survey can keep the reader up to date. (For fur- 
ther information and complete citations, see Bibliography.) 



52 



Chapter 2. Nepal: The Society and Its Environment 



Hanuman, the monkey god of the Ramayana, the Hindu epic. 
Hanuman, aided by monkeys, assists Rama in recovering his wife, Sita, from 
Ravana by bridging the straits between India and Sri Lanka with boulders 
brought from the Himalayas. 



NEPAL IS OFTEN CHARACTERIZED as a country caught 
in two different worlds, having one leg in the sixteenth century 
and another in the twentieth century. Entrenched in a feudalistic 
social structure, the deeply tradition-bound society increasingly was 
experiencing the pervasive influence of Western material culture. 
Most affected were the parts of the population that came in regu- 
lar contact with Westerners. Nowhere was this juxtaposition of 
local traditional values and Western material culture more pro- 
nounced than in the Kathmandu Valley — the country's most ur- 
banized region. 

In the Kathmandu Valley in 1991 , hordes of people took ritual 
baths in the highly polluted Baghmati River, especially near the 
temple of Pashupatinath, and walked to temples that dotted the 
valley's landscape. Numerous peasants carried their produce to the 
market on bicycles or on what is locally called a kharpan, a device 
that resembles a large weighing balance and is carried on the shoul- 
der. Yet, young boys wore T-shirts emblazoned with Michael Jack- 
son or other Hollywood celebrities and watched ' ' Miami Vice" 
or other American television shows. The skyline of urban areas 
such as Kathmandu, Siddhartha Nagar, and Pokhara was inter- 
rupted by television antennas. Copying Western popular culture 
and values had become the thing to do. Nepalese youth even took 
drugs, and the number of drug addicts had increased significantly 
in the 1980s. 

The adoption of Western popular cultural values has not, 
however, translated into much-needed technological and econom- 
ic progress and a consequent reduction in pervasive poverty. 
Although youths, especially those living in and around urban 
centers, readily adopted Western consumer habits, they appeared 
to have littie knowledge about more productive habits that the West 
exemplifies. Entranced by the tide of consumerism, Nepalese youths 
seemed poorly prepared or unwilling to do hard work and make 
sacrifices that were imperative for establishing dynamic economic 
production and development. As a result, consumerism outpaced 
productive capacity — a process that was clearly contrary to sus- 
tained socioeconomic progress — and the country remained in a state 
of economic backwardness. 

Despite Nepal's increasing contact with the West since libera- 
tion from Rana rule in 1951, the feudalistic yoke has not been 
broken (see Modernization under King Mahendra, ch. 1). Even 



55 



Nepal and Bhutan: Country Studies 

after thirty-five years of economic development planning, poverty 
remained throughout the country. Government intervention in eco- 
nomic development under the rubric of planning has led to a break- 
down in the traditional patron-client relations. In the past, this 
relationship provided some security of survival — or what Karl Poly- 
ani termed in 1957 "the absence of the threat of individual 
starvation" — for the clients, although they were placed in a sub- 
servient position. In 1991 such patron-client relations had been 
replaced by wage relations, but planned development had not been 
able to create enough employment opportunities to gainfully ab- 
sorb the clients who no longer could rely on their patrons. 

There was no doubt among observers that only an increasing 
flow of foreign aid and loans had kept Nepal from bankruptcy. Yet 
there seemed to be little evidence suggesting that the aid had, despite 
good intentions, alleviated mass poverty and uplifted the society 
as a whole. Unemployment among the educated was partially ad- 
dressed through the continued expansion of government jobs, but 
such expansion resulted in bureaucratic redundancy and, in fact, 
hindered economic development. Furthermore, such a strategy had 
only a limited ability to reduce the mass unemployment and under- 
employment that typified Nepal's society. Widespread unemploy- 
ment and underemployment, which fueled poverty, were further 
exacerbated by continued rapid population growth. Despite a long- 
term and vigorous family planning program, the population had 
been growing at an increasing rate. Such population growth con- 
tributed to increasing environmental deterioration, given the frailty 
of the country's mountainous environment. 

Geography 
The Land 

Sandwiched between two Asian giants — China and India — Nepal 
traditionally has been characterized as "a yam caught between 
two rocks." Noted for its majestic Himalayas, which in Sanskrit 
means the abode of snow, Nepal is very mountainous and hilly. 
Its shape is roughly rectangular, about 650 kilometers long and 
about 200 kilometers wide, and comprises a total of 147,181 square 
kilometers of land. It is slightly larger than Bangladesh or the state 
of Arkansas. Nepal is a landlocked country, surrounded by India 
on three sides and by China's Xizang Autonomous Region (Tibet) 
to the north. It is separated from Bangladesh by an approximately 
fifteen-kilometer-wide strip of India's state of West Bengal, and from 
Bhutan by the eighty-eight-kilometer-wide Sikkim, also an Indian 
state. Such a confined geographical position is hardly enviable. 



56 



Nepal: The Society and Its Environment 

Nepal is almost totally dependent on India for transit facilities and 
access to the sea — that is, the Bay of Bengal — even for most of the 
goods coming from China. 

For a small country, Nepal has great physical diversity, rang- 
ing from the Tarai Plain — the northern rim of the Gangetic Plain 
situated at about 300 meters above sea level in the south — to the 
almost 8,800-meter-high Mount Everest, locally known as Sagar- 
matha (its Nepali name), in the north. From the lowland Tarai 
belt, landforms rise in successive hill and mountain ranges, includ- 
ing the stupendous rampart of the towering Himalayas, ultimate- 
ly reaching the Tibetan Plateau beyond the Inner Himalayas. This 
rise in elevation is punctuated by valleys situated between moun- 
tain ranges. Within this maze of mountains, hills, ridges, and low 
valleys, elevational (altitudinal) changes resulted in ecological var- 
iations. 

Nepal commonly is divided into three broad physiographic areas: 
the Mountain Region, the Hill Region, and the Tarai Region (see 
fig. 4). All three parallel each other, from east to west, as continu- 
ous ecological belts, occasionally bisected by the country's river 
systems. These ecological regions were divided by the government 
into development sectors within the framework of regional develop- 
ment planning. 

The rhythm of life in Nepal, as in most other parts of monsoonal 
Asia, is intricately yet intrinsically intertwined with its physical en- 
vironment. As scholar Barry Bishop learned from his field research 
in the Karnali region in the northwest, the livelihood patterns of 
Nepal are inseparable from the environment. 

The Mountain Region 

The Mountain Region (called Parbat in Nepali) is situated at 
4,000 meters or more above sea level to the north of the Hill Region. 
The Mountain Region constitutes the central portion of the 
Himalayan range originating in the Pamirs, a high altitude region 
of Central Asia. Its natural landscape includes Mount Everest and 
seven other of the world's ten highest peaks, which are the legend- 
ary habitat of the mythical creature, the yeti, or abominable snow- 
man. In general, the snow line occurs between 5,000 and 5,500 
meters. The region is characterized by inclement climatic and 
rugged topographic conditions, and human habitation and econom- 
ic activities are extremely limited and arduous. Indeed, the region 
is sparsely populated, and whatever farming activity exists is mostiy 
confined to the low-lying valleys and the river basins, such as the 
upper Kali Gandaki Valley. 



57 



Nepal and Bhutan: Country Studies 




Nepal: The Society and Its Environment 

In the early 1990s, pastoralism and trading were common eco- 
nomic activities among mountain dwellers. Because of their heavy 
dependence on herding and trading, transhumance was widely prac- 
ticed. Herders moved their goths (temporary animal shelters) in ac- 
cordance with the seasonal climatic rhythms, and traders also 
migrated seasonally between highlands and lowlands, buying and 
selling goods and commodities in order to generate much-needed 
income and to secure food supplies. 

The Hill Region 

Situated south of the Mountain Region, the Hill Region (called 
Pahar in Nepali) is mostly between 1,000 and 4,000 meters in al- 
titude. It includes the Kathmandu Valley, the country's most fer- 
tile and urbanized area. Two major ranges of hills, commonly 
known as the Mahabharat Lekh and Siwalik Range (or Churia 
Range), occupy the region. In addition, there are several inter- 
montane valleys. Despite its geographical isolation and limited eco- 
nomic potential, the region always has been the political and cultural 
center of Nepal, with decision-making power centralized in Kath- 
mandu, the nation's capital. Because of immigration from Tibet 
and India, the hill ranges historically have been the most heavily 
populated area. Despite heavy out-migration, the Hill Region com- 
prised the largest share of the total population in 1991. 

Although the higher elevations (above 2,500 meters) in the region 
were sparsely populated because of physiographic and climatic 
difficulties, the lower hills and valleys were densely settled. The 
hill landscape was both a natural and cultural mosaic, shaped by 
geological forces and human activity. The hills, sculpted by hu- 
man hands into a massive complex of terraces, were extensively 
cultivated. 

Like the Mountain Region, the Hill Region was a food-deficit 
area in the early 1990s, although agriculture was the predominant 
economic activity supplemented by livestock raising, foraging, and 
seasonal migrating of laborers. The vast majority of the households 
living in the hills were land-hungry and owned largely pakho (hil- 
ly) land. The poor economic situation caused by lack of sufficient 
land was aggravated by the relatively short growing season, a 
phenomenon directly attributable to the climatic impact of the 
region's higher altitude. As a result, a hill farmer's ability to grow 
multiple crops was limited. The families were forced to adapt to 
the marginality, as well as the seasonality, of their environment, 
cultivating their land whenever they could and growing whatever 
would survive. Bishop has noted that "as crop productivity 
decreases with elevation, the importance of livestock in livelihood 



59 



Nepal and Bhutan: Country Studies 

pursuits . . . increases. For many Bhotia [or Bhote] living in the 
highlands . . . animal husbandry supplants agriculture in impor- 
tance. ' ' During the slack season, when the weather did not permit 
cropping, hill dwellers generally became seasonal migrants, who 
engaged in wage labor wherever they could find it to supplement 
their meager farm output. Dependence on nonagricultural activi- 
ties was even more necessary in the mountain ecological belt. 

The Tarai Region 

In complete topographic contrast to the Mountain and Hill 
regions, the Tarai Region is a lowland tropical and subtropical belt 
of flat, alluvial land stretching along the Nepal-India border, and 
paralleling the Hill Region. It is the northern extension of the Gan- 
getic Plain in India, commencing at about 300 meters above sea 
level and rising to about 1,000 meters at the foot of the Siwalik 
Range. The Tarai includes several valleys {dun), such as the Sur- 
khet and Dang valleys in western Nepal, and the Rapti Valley (Chit- 
wan) in central Nepal. 

The word tarai, a term presumed to be derived from Persian, 
means "damp," and it appropriately describes the region's hu- 
mid and hot climate. The region was formed and is fed by three 
major rivers: the Kosi, the Narayani (India's Gandak River), and 
the Karnali. A region that in the past contained malaria-infested, 
thick forests, commonly known as char kosejhari (dense forests ap- 
proximately twelve kilometers wide), the Tarai was used as a defen- 
sive frontier by Nepalese rulers during the period of the British 
Raj (1858-1947) in India. In 1991 the Tarai served as the coun- 
try's granary and land resettlement frontier; it became the most 
coveted internal destination for land-hungry hill peasants. 

In terms of both farm and forest lands, the Tarai was becoming 
Nepal's richest economic region. Overall, Tarai residents enjoyed 
a greater availability of agricultural land than did other Nepalese 
because of the area's generally flat terrain, which is drained and 
nourished by several rivers. Additionally, it has the largest com- 
mercially exploitable forests. In the early 1990s, however, the forests 
were being increasingly destroyed because of growing demands for 
timber and agricultural land. 

Climate 

Nepal has a great deal of variation in climate. Its latitude is about 
the same as that of Florida, and a tropical and subtropical climate 
exists in the Tarai Region. Outside the Tarai, however, the cli- 
mate is completely different. The remarkable differences in climatic 
conditions are primarily related to the enormous range of altitude 



60 



Nepal: The Society and Its Environment 



within such a short north- south distance. The presence of the east- 
west-trending Himalayan massifs to the north and the monsoonal 
alteration of wet and dry seasons also gready contribute to local 
variations in climate. Scholar Sharad Singh Negi identifies five cli- 
matic zones in Nepal based on altitude: the tropical and subtropi- 
cal zone of below 1,200 meters in altitude; the cool, temperate zone 
of 1,200 to 2,400 meters in altitude; the cold zone of 2,400 to 3,600 
meters in altitude; the subarctic climatic zone of 3,600 to 4,400 
meters in altitude; and the arctic zone above 4,400 meters in alti- 
tude. In terms of natural vegetational regimes or distribution pat- 
terns, altitude again plays a significant role. Below 1,200 meters, 
the dominant form of vegetation consists of tropical and subtropi- 
cal rain forests. 

Altitude also affects annual rainfall or precipitation patterns. Up 
to about 3,000 meters, annual rainfall totals increase as the alti- 
tude increases; thereafter, annual totals diminish with increasing 
altitude and latitude. In addition to this latitudinal differentiation 
in rainfall, two other patterns can be discerned. First, given the 
northwestward movement of the moisture-laden summer monsoon 
(June to September), the amount of annual rainfall generally 
decreases from east to west. However, there are certain pockets 
with heavy annual rainfall totals, for example, the Pokhara Valley 
in central Nepal. Second, the horizontal extension of hill and moun- 
tain ranges creates a moist condition on south-and east-facing slopes 
whereas it produces a major rain shadow on the northern sides of 
the slopes. The aridity increases with altitude and latitude, espe- 
cially on the northern slopes, and reaches its climax in the inner 
Himalayan region and on the Tibetan Plateau. Eastern Nepal 
receives approximately 2,500 millimeters of rain annually, the Kath- 
mandu area about 1,420 millimeters, and western Nepal about 
1,000 millimeters. 

The towering Himalayas play a critical role, blocking the north- 
westerly advances of moist, tropical air from the Bay of Bengal, 
and ultimately leading to its conversion to rain in the summer. In 
the winter, this range prevents the outbursts of cold air from Inner 
Asia from reaching southern Nepal and northern India, thus ensuring 
warmer winters in these regions than otherwise would be the case. 

In addition, there are seasonal variations in the amount of rain- 
fall, depending on the monsoon cycle. Bishop divides the monsoon 
cycle into four seasons: premonsoon, summer monsoon, postmon- 
soon, and winter monsoon. The premonsoon season generally oc- 
curs during April and May; it is characterized by the highest 
temperatures, reaching 40°C during the day in the Tarai Region 
and other lowlands. The hills and mountains, however, remain cool. 



61 



Nepal and Bhutan: Country Studies 

The summer monsoon, a strong flow of moist air from the south- 
west, follows the premonsoon season. For the vast majority of 
southern Asians, including Nepalese, the term monsoon is synony- 
mous with the summer rainy season, which makes or breaks the 
lives of hundreds of millions of farmers on the subcontinent. Even 
though the arrival of the summer monsoon can vary by as much 
as a month, in Nepal it generally arrives in early June, is preced- 
ed by violent lightning and thunderstorms, and lasts through Sep- 
tember, when it begins to recede. The plains and lower Himalayas 
receive more than 70 percent of their annual precipitation during 
the summer monsoon. The amount of summer monsoon rain gener- 
ally declines from southeast to northwest as the maritime wedge 
of air gradually becomes thinner and dryer. Although the success 
of farming is almost totally dependent on the timely arrival of the 
summer monsoon, it periodically causes landslides; subsequent loss- 
es of human lives, farmlands, and other properties (not to men- 
tion great difficulty in the movement of goods and people); and 
heavy flooding in the plains. Conversely, when prolonged breaks 
in the summer monsoon occur, severe drought and famine often 
result. 

The postmonsoon season begins with a slow withdrawal of the 
monsoon. This retreat leads to an almost complete disappearance 
of moist air by mid-October, thus ushering in generally cool, clear, 
and dry weather, as well as the most relaxed and jovial period in 
Nepal. By this time the harvest is completed and people are in a 
festive mood. The two biggest and most important Hindu 
festivals — Dashain and Tihar (Dipawali) — arrive during this period, 
about one month apart (see Religion, this ch.). The postmonsoon 
season lasts until about December. 

After the postmonsoon, comes the winter monsoon, a strong 
northeasterly flow, which is marked by occasional, short rainfalls 
in the lowlands and plains and snowfalls in the high-altitude areas. 
The amount of precipitation resulting from the northeast land trade 
winds varies considerably but increases markedly with elevation. 
The secondary winter precipitation in the form of snowfalls in the 
Himalayas is important for generating a sufficient volume of spring 
and summer meltwaters, which are critical for irrigation in the lower 
hills and valleys where agriculture predominates. Winter precipi- 
tation is also indispensable for the success of winter crops, such 
as wheat, barley, and numerous vegetables. 

The River System 

Nepal can be divided into three major river systems from east 
to west: the Kosi River, the Narayani River (India's Gandak 



62 




Figure 5. Nepal: Topography and Drainage 
64 



Nepal: The Society and Its Environment 

River), and the Karnali River (see fig. 5). All ultimately become 
major tributaries of the Ganges River in northern India. After 
plunging through deep gorges, these rivers deposit their heavy sedi- 
ments and debris on the plains, thereby nurturing them and renew- 
ing their alluvial soil fertility. Once they reach the Tarai Region, 
they often overflow their banks onto wide floodplains during the 
summer monsoon season, periodically shifting their courses. Be- 
sides providing fertile alluvial soil, the backbone of the agrarian 
economy, these rivers present great possibilities for hydroelectric 
and irrigation development. India managed to exploit this resource 
by building massive dams on the Kosi and Narayani rivers inside 
the Nepal border, known, respectively, as the Kosi and Gandak 
projects (see Energy, ch. 3). None of these river systems, however, 
support any significant commercial navigation facility. Rather, the 
deep gorges formed by the rivers represent immense obstacles to 
establishing the broad transport and communication networks need- 
ed to develop an integrated national economy. As a result, the econ- 
omy in Nepal has remained fragmented. Because Nepal's rivers 
have not been harnessed for transportation, most settlements in 
the Hill and Mountain regions remain isolated from each other. 
As of 1991, trails remained the primary transportation routes in 
the hills. 

The eastern part of the country is drained by the Kosi River, 
which has seven tributaries. It is locally known as the Sapt Kosi, 
which means seven Kosi rivers (Tamur, Likhu Khola, Dudh, Sun, 
Indrawati, Tama, and Arun). The principal tributary is the Arun, 
which rises about 150 kilometers inside the Tibetan Plateau. The 
Narayani River drains the central part of Nepal and also has seven 
major tributaries (Daraudi, Seti, Madi, Kali, Marsyandi, Budhi, 
and Trisuli). The Kali, which flows between the Dhaulagiri Himal 
and the Annapurna Himal (Himal is the Nepali variation of the 
Sanskrit word Himalaya), is the main river of this drainage system. 
The river system draining the western part of Nepal is the Karna- 
li. Its three immediate tributaries are the Bheri, Seti, and Karnali 
rivers, the latter being the major one. The Maha Kali, which also 
is known as the Kali and which flows along the Nepal-India bor- 
der on the west side, and the Rapti River also are considered tribu- 
taries of the Karnali. 

Population 

Population Structure and Settlement Patterns 

At the time of the 1981 census, the total population of Nepal 
was 15,022,839, the average family was made up of 5.8 persons, 



65 



Nepal and Bhutan: Country Studies 

and life expectancy at birth was close to fifty years. As of July 1990, 
the population was estimated at 19,145,800 persons. The annual 
population growth rate increased from less than 2 percent during 
the 1950s to more than 2.6 percent in 1990, suggesting that despite 
a trend toward increasing acceptance of family planning, the pro- 
gram did not have much influence on reducing the population 
growth rate. The Central Bureau of Statistics forecast that the to- 
tal population would increase to 23.6 million by 2001 (see table 
2, Appendix). 

The 1981 census reveals a significant variation in regional growth 
rates. Although the Tarai Region's annual growth rate of 4.2 per- 
cent was much higher than the national average, the Hill and 
Mountain regions, respectively, posted growth rates of 1 .7 and 1 .4 
percent. In terms of regional distribution, 43.6 percent (6,556,828 
persons) of the country's population resided in the Tarai, whereas 
the shares of the Hill and Mountain regions totaled 7,163,1 15 (47.7 
percent) and 1,302,896 (8.7 percent), respectively. 

About 70 percent of the total population was of working age, 
or between the ages of fifteen and fifty-nine years. More than 65 
percent of this segment of the population was considered econom- 
ically active in 1981 (see Labor, ch. 3). In terms of employment 
structure, more than 91 percent of the economically active popu- 
lation was engaged in agriculture and allied activities, and the rest 
in the secondary (industrial) and tertiary (service) sectors, includ- 
ing government employment. In 1981 males and females who were 
widowed or separated constituted only a tiny fragment of the 
population — 0.4 percent for each sex. 

Dependency and Sex Ratios 

The dependency ratio is defined as the ratio of the population 
in the birth to fourteen age- group, and those sixty years and older, 
to the population in the productive age-group, that is, fifteen to 
fifty-nine years of age. In 1981 this ratio stood at eighty to nine. 
The temporal increase in the number of those in the young popu- 
lation group has depressed the median age of the population from 
21.1 years in the mid-1950s to 19.9 years in 1981. The sex ratio 
in 1981, defined as the number of males to 100 females, was 105 
males to every 100 females (see fig. 6). 

Fertility and Mortality 

According to the estimates made by the Central Bureau of Statis- 
tics in 1985, the crude birthrate was 44 per 1,000, and the crude 
death rate was almost 14 per 1,000. The total fertility rate, defined 
as the average number of children a woman might bear, was 6.3 



66 



Nepal: The Society and Its Environment 

children, with a variation between rural and urban fertility rates. 
The rural total fertility rate was 6.4, compared with 5.8 for urban 
areas. Both the crude birthrate and the total fertility rate have re- 
mained high and fairly constant for the past several decades, 
whereas the crude death rate has been declining consistently, there- 
by contributing to rapid population growth. 

The most significant category of deaths was the infant mortality 
rate. Varying techniques for calculating infant mortality, however, 
have led to discrepant estimations. They ranged from more than 
147 deaths per 1,000 in 1985 to between 101 and 128 per 1,000 
in 1989. Infant mortality rates also varied widely among the three 
geographic regions, which may have been partly because of differing 
rates of migration and the expectancy that higher mortality rates 
are found in migrant families. Nonetheless, infant mortality was 
almost twice as high in rural areas as urban areas, a clear indica- 
tion of the lack of health services in rural areas, and was high com- 
pared to many other Asian countries (see Health Care Facilities, 
this ch.). 

Population Density 

One of the major consequences of rapid population growth was 
the progressive deterioration of the ratio of people to land. This 
land shortage greatly affected Nepal's predominantly agrarian so- 
ciety, where land was the most important source of livelihood and 
social status, and it was most evident in terms of population den- 
sity. In 1981 the population density was 102 persons per square 
kilometer of total land. Although the ratio appears to suggest a fairly 
low density, the figures are misleading. When density is measured 
in terms of persons per hectare of cultivatable land (that is, agricul- 
tural density), the true nature of the human-land ratio emerges. 
The agricultural density in 1981 was 6.1 persons per hectare (or 
almost 0.2 hectare per person), which represents a very high den- 
sity, especially given that the country's production technology re- 
mains in a backward state (see table 3, Appendix). Nepal's ability 
to reclaim more land in order to accommodate a rapidly growing 
population already had reached a maximum threshold. 

Urbanization 

Urbanization, defined as the percentage of total population living 
in settlements designated as urban areas, generally was viewed as 
closely related to economic development. If the correlation between 
urbanization and economic development — historically based on the 
experience of the industrialized nations — is accepted, then Nepal 
has a long way to go before it becomes economically advanced. 



67 



Nepal and Bhutan: Country Studies 



AGE-GROUP 




1,000 500 500 1,000 

POPULATION IN THOUSANDS 



Source: Based on information from Nepal, National Planning Commission Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1988, Kathmandu, 1988, 
26. 

Figure 6. Nepal: Population Distribution by Age and Sex, 1988 

Nepal was one of the least urbanized countries in the world, with 
only 6.3 percent of its total population residing in urban areas in 
1981 . Yet it appears that the 1971-81 decade experienced a major 
growth spurt in urban population, increasing by approximately 108 
percent, at an annual rate of more than 8.4 percent. The urbani- 
zation rate in the early 1990s was around 8 percent. Nevertheless, 
only twenty- three settlements were designated as urban areas, and 
only one of these settlements — the capital city of Kathmandu — 
had a population above 100,000. Kathmandu had a total popula- 
tion of slightly more than 235,000. Together with the other two 
major urban settlements— Patan (also called Lalitpur), which had 
about 79,800 people, and Bhadgaon (also called Bhaktapur), with 
about 48,500 people— the Kathmandu Valley in the Hill Region 



68 



Nepal: The Society and Its Environment 

had the largest concentration of the total urban population — almost 
40 percent. 

In terms of the regional distribution of these urban settlements, 
the pattern was skewed in favor of the Tarai. Fourteen of the twenty- 
three settlements were found there, the majority located in eastern 
and central Tarai. The Mountain Region had no urban settlements. 
This situation clearly demonstrated that Nepal not only remained 
predominantly rural, but also that the existing urban areas were 
neither well developed nor well connected in terms of their geo- 
graphical distribution. The only real urban network was found in 
the central section — the quadrangle consisting of Kathmandu, 
Pokhara, Butawal (and Siddhartha Nagar), and Hetauda. 

Migration 

Nepal was once a sanctuary for waves of migrants from north 
and south of its borders. The early migration from the north was 
largely of nomadic Mongoloid people from Tibet (the Bhote 
groups), followed by waves of Indo-Aryans from India. Some 
of the migrants from the south, especially the Brahmans and Raj- 
puts, were fleeing the religious crusades of invading Mughals (or 
Indian Muslims) and their suppression of Hindus; others (espe- 
cially those from Bihar and West Bengal) were lured by the possi- 
bilities of the Tarai land. As of 1991, a large number of Indians 
from Bihar and other neighboring areas still crossed the border into 
Nepal. Most of those recent migrants were found in towns and 
cities, where they were engaged in semiskilled labor and mercan- 
tile activities. 

Since at least the late nineteenth century, the migration trend 
has reversed its course. In the early 1990s, there was a massive 
and persistent outflow of people from the hills, the areas that had 
once served as a refuge for migrants. In addition, the volume of 
migration has been increasing over time. There have been two 
major types of migration. Permanent or lifetime migration occurred 
primarily within the national boundary, particularly from the high- 
lands to the Tarai Region; it was motivated by the search for land. 
Circular migration included seasonal migrants, who moved to wage- 
labor sites, such as urban centers and construction areas, during 
the agricultural slack season (November to February). These cir- 
cular or absentee migrants included long-term (but not permanent) 
migrants, who moved in search of long-term salaried employment, 
such as army, government, chaukidar (doorman or guard) services, 
or factory jobs. Once these migrants succeeded in landing a rela- 
tively permanent job, they normally visited their families and vil- 
lages once every two to three years; if they did not secure such a 



69 



Nepal and Bhutan: Country Studies 

job, they might return in a few months. Unlike permanent migra- 
tion, circular migration was both internal (within the country) as 
well as external (outside the country). Although internal circular 
migrants ultimately might become permanent migrants, the vast 
majority of external circular migrants, most of whom went to In- 
dia, returned to Nepal upon their retirement and discharge from 
service. Increasing numbers of these external migrants settled in 
the Indian states of West Bengal and Assam, and they have been 
filtering into Bhutan since the late nineteenth century (see Popu- 
lation, ch. 6). 

Lifetime Regional Migration 

Until the mid-1950s, the volume of permanent migration within 
the country was very small. Since then, however, there has been 
increased permanent internal migration, mainly because of popu- 
lation pressures, paucity of land resources in the hills, and the im- 
plementation of land resettlement programs in the Tarai Region. 
This form of migration was identified in the 1981 census as life- 
time internal migration. 

The total volume of lifetime internal migration in 1981 was close 
to 1,272,300 persons, a figure that represented 8.5 percent of the 
total population. The vast majority of lifetime internal migrants 
originated in the Hill and Mountain regions and moved to the Tarai 
Region in search of land in a movement that can be called frontier 
migration (see table 4, Appendix). These findings confirmed that 
the north-south (highland-lowland) flows of migration have made 
a substantial contribution — both directly and indirectly — to the 
rapid population growth of the Tarai Region. 

One of the major variables responsible for this trend was the Hill 
residents' quest for land. About half of the male Hill migrants to 
the Tarai mentioned "agriculture" as their reason for migrating 
(see table 5, Appendix). The "not stated and others" category also 
constituted a high percentage, probably because most family mem- 
bers who moved with their parents or household heads had no specif- 
ic reason for their migration. 

A high score for trade and commerce among the mountain 
migrants might reflect the fact that they historically were deeply 
engaged in interregional as well as cross-border trade with Tibet 
as their principal economic activity. Because their traditional trade 
and commercial relations with Tibet had been largely cut off be- 
cause of political changes after 1950, they might have moved to 
the Tarai, where such opportunities were expanding, particularly 
in urban areas. 



70 



Namche Bazar, the gateway to Khumbu, on the route to Mount Everest 

Courtesy Janet MacDonald 

The pattern for female migrants was generally consistent with 
the pattern for male migrants. The exception was female migrants 
for whom marriage as a reason for geographical mobility ranked 
quite high. This pattern generally reflected the commonly observed 
reality that female mobility in Nepal was largely tied to family mo- 
bility (that is, husbands or parents). Although individual (unmar- 
ried) female migration seemed to be gradually on the rise, it still 
was quite limited. 

Circular Migration 

Circular migrants, both internal and external, were classified 
as absentee population in the 1981 census. The major difference 
between the two groups was that the internal absentee population 
generally consisted of short-term or seasonal migrants. Such 
migrants left the hills in search of temporary jobs in nearby towns 
or at construction sites and generally returned to their villages af- 
ter the winter season to resume farming. On the other hand, the 
external absentee population was largely composed of long-term 
migrants. In the cases of both types, most migrants were adult males 
although some husbands periodically took their wives with them 
after they were well established in their jobs. 



71 



Nepal and Bhutan: Country Studies 

The volume of circular migration, or absentee population, has 
been rising. In the mid-1950s, such migration totaled almost 
217,000 persons, most coming from the hills. More than 90 per- 
cent, or more than 198,000 people, were external migrants; the 
vast majority went to India. In 1981 the absentee population to- 
taled almost 591,000 people. Of these, 188,000 people, or 32 per- 
cent, were internal migrants, and approximately 403,000 people, 
or 68 percent, were external migrants. Even though the percent- 
age of external migrants in the total absentee population had 
declined from 90 percent in the mid-1950s to 68 percent in 1981, 
their absolute number had increased by 205,000 people. Whereas 
the increasing number of absentee population from the hills was 
an unmistakable indicator of the region's deteriorating economic 
and environmental conditions, the decreasing percentage of external 
migration in the total volume was largely the result of the emer- 
gence of the Tarai as an alternative, internal destination. 

The vast majority of migrants came from the Hill and Moun- 
tain regions. Together, they made up 141,200 (85 percent) of the 
total of internal migrants and about 365,000 (91 percent) of total 
external migrants. Unlike in the Hill and Mountain regions, the 
majority of the Tarai's 82,650 absentees were found within the 
country. 

An analysis of reasons for absence from home revealed quite a 
contrast between lifetime internal migration and circular migra- 
tion. Service, which included a variety of jobs, surfaced as the most 
dominant reason for being absent from home in both internal and 
external cases of circular migration. On the average, 64 percent 
of external migrants mentioned service as their reason for migra- 
tion, the highest rate being posted by the Hill migrants; 28 per- 
cent gave no reasons, or other reasons (see table 6, Appendix). 

Population Planning 

Although Nepal's population continued to grow at a rapid pace 
in the face of deteriorating per capita land availability, the coun- 
try's economy as a whole remained underdeveloped. Economic 
growth barely kept pace with population growth. Given this reali- 
ty, many viewed effective family planning as a national impera- 
tive. The need for family planning was recognized as early as 1958, 
when a private organization, the Nepal Family Planning Associa- 
tion, was established in Kathmandu. Although the government for- 
mally adopted a national family planning policy in 1965, its 
availability was limited to the Kathmandu Valley until 1968, when 
a semiautonomous board was established. This Nepal Family Plan- 
ning and Maternal Child Health Board was authorized to formulate 



72 



Nepal: The Society and Its Environment 

and to implement family planning policy and programs for the en- 
tire country. Under the auspices of the board, attempts have been 
made to provide family planning and maternal- child health ser- 
vices outside the Kathmandu Valley, with the help of paramedics 
and health-care workers who have some basic training. As of 1989, 
the board offered family planning services in fifty-two of Nepal's 
seventy-five districts. Despite these efforts, the rural population 
generally lacked access to family planning services. 

Such services were provided by three means: stationary offices, 
mobile facilities, and door-to-door campaigns. The stationary offices 
generally were attached to a health-care institution, such as health 
posts, health centers, or hospitals. As an addition to the staff at 
these institutions, the board assigned a minimum of two full-time 
workers to deliver family planning and maternal-child health ser- 
vices. However, it has been reported that most health and family 
planning workers in rural health posts rarely were found in their 
assigned units. As a result, the availability of such services in rural 
areas remained poor. 

The mobile facilities were a product of necessity, given the re- 
moteness of much of the population and the lack of local family 
planning facilities, or easy accessibility to such a facility. They 
reached a large part of the country and almost exclusively stressed 
permanent family limitation, that is, sterilization. Mobile sterili- 
zation camps moved around the country; local residents were noti- 
fied of their scheduled arrival in advance and asked to take 
advantage of the service. A few days or even weeks prior to the 
arrival of the camp, a campaign was launched to motivate and to 
educate people about the benefits and needs of family planning. 
The camp generally lasted only a few days, rarely more than a week. 
Because most villagers were unwilling to come to family planning 
centers to obtain services, the Nepal Family Planning and Ma- 
ternal Child Health Board launched a door-to-door campaign to 
educate villagers about family planning and to distribute oral con- 
traceptives and condoms on a periodic basis. 

The government's direct expenditure on family planning in fis- 
cal year (FY — see Glossary) 1985 was about 1 percent, or Rs54.7 
million (for value of the rupee — see Glossary), of the national 
budget. In the same year, the government spent almost 16.5 per- 
cent of its total budget on health services. It was difficult to de- 
termine what percentage of the health budget was channeled to 
provide family planning services. Although the expenditure on 
family planning appeared to be relatively low given the gravity 
of the issue, the absolute budget amount had gone up significantly 
in the 1970s and 1980s: from Rs2 million in FY 1969, when the 



73 



Nepal and Bhutan: Country Studies 

board was set up, to almost Rs55 million in FY 1985. In FY 1981, 
more than 60 percent of the board's budget was borne by foreign 
agencies. 

In terms of absolute numbers, the diffusion of family planning 
increased significantly over two decades. In FY 1969, only 7,774 
persons had adopted family planning; by FY 1985, the number 
who had adopted family planning had climbed to almost 340,000 
persons. 

Caste and Ethnicity 

Ethnic Groups 

Nepalese society was ethnically diverse and complex in the early 
1990s, ranging in phenotype (physical characteristics) and culture 
from the Indian to the Tibetan. Except for the sizable population 
of those of Indian birth or ancestry concentrated in the Tarai bor- 
dering India, the varied ethnic groups had evolved into distinct 
patterns over time. 

Political scientists Joshi and Rose broadly classify the Nepalese 
population into three major ethnic groups in terms of their origin: 
Indo-Nepalese, Tibeto-Nepalese, and indigenous Nepalese. In the 
case of the first two groups, the direction of their migration and 
Nepal's landscapes appeared to have led to their vertical distribu- 
tion; most ethnic groups were found at particular altitudes. The 
first group, comprising those of Indo-Nepalese origin, inhabited 
the more fertile lower hills, river valleys, and Tarai plains. The 
second major group consisted of communities of Tibeto-Mongol 
origin occupying the higher hills from the west to the east. The 
third and much smaller group comprised a number of tribal com- 
munities, such as the Tharus and the Dhimals of the Tarai; they 
may be remnants of indigenous communities whose habitation pre- 
dates the advent of Indo-Nepalese and Tibeto-Mongol elements. 

Even though Indo-Nepalese migrants were latecomers to Nepal 
relative to the migrants from the north, they have come to dominate 
the country not only numerically, but also socially, politically, and 
economically. They managed to achieve early dominance over the 
native and northern migrant populations, largely because of the 
superior formal educational and technological systems they brought 
with them. Consequently, their overall domination has had tremen- 
dous significance in terms of ethnic power structure. 

Within the Indo-Nepalese group, at least two distinct categories 
can be discerned. The first category includes those who fled India 
and moved to the safe sanctuaries of the Nepal hills several hundred 
years ago, in the wake of the Muslim invasions of northern India. 



74 



Terracing in the Rapti 
Valley, between 
Tulsipur and Salyan 
Courtesy 
John N. Gunning 




The hill group of Indian origin primarily was composed of descen- 
dants of high-caste Hindu families. According to Joshi and Rose, 
"These families, mostly of Brahman and Kshatriya status, have 
spread through the whole of Nepal with the exception of the areas 
immediately adjacent to the northern border. They usually con- 
stitute a significant portion of the local elites and are frequently 
the largest landowners in an area." This segment of the Indo- 
Nepalese population, at the apex of which stands the nation's roy- 
al family, has played the most dominant role in the country. Other 
ethnic groups, including those of Indian origin that settled in the 
Tarai, have been peripheral to the political power structure. 

The second group of Indo-Nepalese migrants includes the in- 
habitants of the Tarai. Many of them are relatively recent migrants, 
who were encouraged by the government of Nepal or its agents 
to move into the Tarai for settlement during the nineteenth and 
early twentieth centuries. In the early 1990s, this group mostly con- 
sisted of landless tenants and peasants from northern India's border 
states of Bihar and Bengal. Some of these Indian migrants later 
became large landowners. 

The north Indian antecedents of a number of caste groups in 
the hills (that is, the first group of Indo-Nepalese migrants), which, 
in the early 1990s, made up more than 50 percent of the total popu- 
lation, are evident in their language, religion, social organization, 
and physical appearance. All of these features, however, have been 



75 



Nepal and Bhutan: Country Studies 

modified in the Nepalese environment. These groups — several 
castes of Brahmans, the high-ranking Thakuri and Chhetri (the 
Nepalese derivative of the Kshatriya) castes, and an untouchable 
category— generally are classified as Pahari, or Parbate. However, 
in most parts of Nepal (except in the Tarai), the term pahari has 
only a limited use in that the Paharis generally are known by their 
individual caste names (see Caste and Ethnicity, this ch.). 

Nepali, the native tongue of the Paharis and the national lan- 
guage of Nepal, is closely related to, but by no means identical 
with, Hindi. Both are rooted in Sanskrit. The Hinduism of the 
Pahari has been influenced by Buddhism and indigenous folk be- 
lief. The Paharis' caste system was neither as elaborately graded 
nor as all embracing in its sanctions as that of the Indians; physi- 
cally, many of the Paharis showed the results of racial intermix- 
ture with the various Mongoloid groups of the region. Similarly, 
the Bhote or Bhotia groups inhabiting the foothills of the 
Himalayas — among whom the Sherpas have attracted the most at- 
tention in the mountaineering world — have developed regional dis- 
tinctions among themselves, although clearly related physically as 
well as culturally to the Tibetans. The term Bhote literally means 
inhabitant of Bhot, a Sanskrit term for the trans- Himalayan region 
of Nepal, or the Tibetan region. However, Bhote is also a generic 
term, often applied to people of Tibetan culture or Mongoloid 
phenotype. As used by the Paharis and the Newars, it often had 
a pejorative connotation and could be applied to any non-Hindu 
of Mongoloid appearance. 

An extraordinarily complex terrain also affected the geographic 
distribution and interaction among various ethnic groups (see fig. 
7). Within the general latitudinal sorting of Indo-Nepalese (lower 
hills) and Tibeto-Nepalese (higher hills and mountains) groups, 
there was a lateral (longitudinal) pattern, in which various ethnic 
populations were concentrated in specific geographic pockets. The 
deeply cut valleys and high ridges tended to divide ethnic groups 
into many small, relatively isolated, and more or less self-contained 
communities. This pattern was especially prominent among the 
Tibeto-Nepalese population. For example, the Bhote group was 
found in the far north, trans-Himalayan section of the Mountain 
Region, close to the Tibetan border. The Sherpas, a subgroup 
within the Bhote, were concentrated in the northeast, around the 
Mount Everest area. To the south of their areas were other Tibeto- 
Nepalese ethnic groups — the Gurung in the west-central hills and 
the Tamang and Rai in the east-central hills — particularly close 
to and east of the Kathmandu Valley. The Magar group, found 
largely in the central hills, was much more widely distributed than 



76 



Nepal: The Society and Its Environment 

the Gurung, Tamang, and Rai. In the areas occupied by the Limbu 
and Rai peoples, the Limbu domain was located farther east in 
the hills, just beyond the Rai zone. The Tharu group was found 
in the Tarai, and the Paharis were scattered throughout Nepal. 
Newars largely were concentrated in the Kathmandu Valley. 
However, because of their past migration as traders and merchants, 
they also were found in virtually all the market centers, especially 
in the hills, and as far away as Lhasa in Tibet. 

This geographically concentrated ethnic distribution pattern 
generally remained in effect in the early 1990s, despite a trend 
toward increasing spatial mobility and relocating ethnic popula- 
tions. For example, a large number of Bhotes (also called Mananges 
from the Manang District) in the central section of the Mountain 
Region, Tamangs, and Sherpas have moved to the Kathmandu 
Valley. Similarly, Thakalis from the Mustang District adjacent to 
Manang have moved to Pokhara, a major urban center in the hills 
about 160 kilometers west of Kathmandu, and to Butawal and Sid- 
dhartha Nagar, two important urban areas in the central part of 
the Tarai, directly south of Pokhara. Gurungs, Magars, and Rais 
also have become increasingly dispersed. 

Most of the Indo-Nepalese peoples — both Paharis and Tarai 
dwellers (commonly known among the Paharis as madhesis, mean- 
ing midlanders) — were primarily agriculturalists, although a majority 
of them also relied on other activities to produce supplementary 
income. They generally raised some farm animals, particularly 
water buffalo, cows, goats, and sheep, for domestic purposes. The 
Paharis traditionally have occupied the vast majority of civil ser- 
vice positions. As a result, they have managed to dominate and 
to control Nepal's bureaucracy to their advantage. It was not until 
the 1980s that a prime minister came from the non-Pahari segment 
of the population. Despite some loosening of the total Pahari domi- 
nation of the bureaucracy in recent years, a 1991 newspaper report, 
summarized in the Nepal Press Digest, revealed that 80 percent of 
the posts in the civil service, the army, and the police still were 
held by the Brahmans and Chhetris of the hills, who comprised 
less than 50 percent of the population; 13 percent were held by 
Kathmandu Valley Newars, whose share of the total population 
was merely 3 percent. The report added that even in 1991, the 
eleven-member Council of Ministers had six Brahmans and three 
Newars. Furthermore, six of the nine-member Constitution Recom- 
mendation Commission, which drafted the new constitution in 
1990, were hill Brahmans (see The Constitution of 1990, ch. 4). 
In spite of the increasing number of Newars holding government 
jobs, they traditionally were recognized as a commercial merchant 



77 



Nepal and Bhutan: Country Studies 




78 



Nepal: The Society and Its Environment 

and handicraft class. It was no exaggeration that they historically 
have been the prime agents of Nepalese culture and art. A signifi- 
cant number of them also were engaged in farming. In that sense, 
they can be described as agro-commercialists. 

Most of the Tibeto-Nepalese groups traditionally could be con- 
sidered agro-pastoralists. Because their physical environment offered 
only limited land and agricultural possibilities, the Tibeto-Nepalese 
groups who occupied the high mountainous areas, such as the Bhote 
and particularly the Sherpa, were almost forced to rely more on 
herding and pastoral activities than on crop farming. They also 
participated in seasonal trading activity to supplement their income 
and food supply. However, those peoples inhabiting the medium 
and low hills south of the high mountains — particularly the Gurung, 
Magar, Tamang, Rai, and Limbu groups — depended on farming 
and herding in relatively equal amounts because their environment 
was relatively more suitable for agriculture. Among these groups, 
the Gurung, Magar, and Rai historically have supplied the bulk 
of the famous Gurkha (see Glossary) contingents to the British and 
Indian armies, although their ranks have been augmented from 
the Thakuri and Chhetri castes of the Indo-Nepalese Paharis (see 
Origins of the Legendary Gurkha, ch. 5). The term Gurkha was 
derived from the name of the former principality of Gorkha, about 
seventy kilometers west of Kathmandu, and was not an ethnic desig- 
nation. 

The Caste System 

One integral aspect of Nepalese society is the existence of the 
Hindu caste system, modeled after the ancient and orthodox Brah- 
manic system of the Indian plains. The caste system did not exist 
prior to the arrival of Indo- Aryans. Its establishment became the 
basis of the emergence of the feudalistic economic structure of 
Nepal: the high-caste Hindus began to appropriate lands — 
particularly lowlands that were more easily accessible, more cul- 
tivatable, and more productive — including those belonging to the 
existing tribal people, and introduced the system of individual 
ownership. Even though the cultural and religious rigidity of the 
caste system slowly has been eroding, its introduction into Nepal 
was one of the most significant influences stemming from the migra- 
tion of the Indo- Aryan people into the hills. The migrants from 
the north later were incorporated into the Hindu caste system, as 
defined by Indo- Aryan migrants, who quickly controlled the posi- 
tions of power and authority. Tibetan migrants did not practice 
private ownership; their system was based on communal ownership. 



79 



Nepal and Bhutan: Country Studies 

No single, widely acceptable definition can be advanced for the 
caste system. Bishop and others, however, view caste as a multi- 
faceted status hierarchy composed of all members of society, with 
each individual ranked within the broad, fourfold Hindu class (varna, 
or color) divisions, or within the fifth class of untouchables — 
outcastes and the socially polluted. The fourfold caste divisions are 
Brahman (priests and scholars), Kshatriya or Chhetri (rulers and 
warriors), Vaisya (or Vaisaya, merchants and traders), and Sudra 
(farmers, artisans, and laborers). These Pahari caste divisions based 
on the Hindu system are not strictly upheld by the Newars. They 
have their own caste hierarchy, which, they claim, is parallel in 
caste divisions to the Pahari Hindu system. In each system, each 
caste (jati) is ideally an endogamous group in which membership 
is both hereditary and permanent. The only way to change caste 
status is to undergo Sanskritization. Sanskritization can be achieved 
by migrating to a new area and by changing one's caste status 
and/or marrying across the caste line, which can lead to the up- 
grading or downgrading of caste, depending on the spouse's caste. 
However, given the rigidity of the caste system, intercaste mar- 
riage carries a social stigma, especially when it takes place between 
two castes at the extreme ends of the social spectrum. 

As Bishop further asserts, at the core of the caste structure is 
a rank order of values bound up in concepts of ritual status, puri- 
ty, and pollution. Furthermore, caste determines an individual's 
behavior, obligations, and expectations. All the social, economic, 
religious, legal, and political activities of a caste society are 
prescribed by sanctions that determine and limit access to land, 
position of political power, and command of human labor. Within 
such a constrictive system, wealth, political power, high rank, and 
privilege converge; hereditary occupational specialization is a com- 
mon feature. Nevertheless, caste is functionally significant only 
when viewed in a regional or local context and at a particular time. 
The assumed correlation between the caste hierarchy and the 
socioeconomic class hierarchy does not always hold. Because of 
numerous institutional changes over the years and increased dilu- 
tion (or expansion) of the caste hierarchy stemming from inter- 
caste marriages, many poor high-caste and rich low-caste households 
could be found in the society in 1991. 

Although Paharis, especially those in rural areas, were general- 
ly quite conscious of their caste status, the question of caste did 
not usually arise for Tibeto-Nepalese communities unless they were 
aware of the Hindu caste status arbitrarily assigned to them. Inso- 
far as they accepted caste-based notions of social rank, the Tibeto- 
Nepalese tended not only to see themselves at a higher level than 



80 



Nepal: The Society and Its Environment 

did the Hindu Pahari and Newar, but also differed as to ranking 
among themselves. Thus, it was doubtful that the reported Rai 
caste's assumption of rank superiority over the Magar and Gurung 
castes was accepted by the two latter groups. Moreover, the status 
of a particular group was apt to vary from place to place, depend- 
ing on its relative demographic size, wealth, and local power. 

Language 

Even though Nepali (written in Devanagari script, the same as 
Sanskrit and Hindi) was the national language and was mentioned 
as the mother tongue by approximately 58 percent of the popula- 
tion, there were several other languages and dialects. Other lan- 
guages included Maithili, Bhojpuri, Tharu, Tamang, Newari, and 
Abadhi. Non-Nepali languages and dialects rarely were spoken out- 
side their ethnic enclaves. In order to estimate the numerical dis- 
tribution of different ethnic groups, the census data indicating 
various mother tongues spoken in the country must be used (see 
table 7, Appendix). 

In terms of linguistic roots, Nepali, Maithili, and Bhojpuri be- 
longed to the Indo-European family; the mother tongues of the 
Tibeto-Nepalese groups, including Newari, belonged predominant- 
ly to the Tibeto-Burman family. The Pahari, whose mother tongue 
was Nepali, was the largest ethnic group. If the Maithili- and 
Bhojpuri- speaking populations of the Tarai were included, more 
than 75 percent of the population belonged to the Indo-Nepalese 
ethnic group. Only three other ethnic groups — the Tamang, the 
Tharu, and the Newar — approached or slightly exceeded the one- 
half million population mark. Most of those non-Nepali linguistic 
and ethnic population groups were closely knit by bonds of nation- 
alism and cultural harmony, and they were concentrated in cer- 
tain areas. 

Social System and Values 

In the mid-twentieth century, Nepal remained gripped in a 
feudalistic socioeconomic structure despite the influence of Western 
popular culture, growing commercialization, and some penetra- 
tion of capitalism. The first challenge to this feudalistic power struc- 
ture came in 1950-51, when the Rana autocracy was overthrown 
by the popular democratic movement that restored the authority 
of the monarchy (see Rana Rule, ch. 1). 

There was no popularly elected government until 1959. During 
his reign, King Mahendra Bir Bikram Shah Dev frequentiy changed 
the government, pitting one ruling clan against another in a man- 
ner clearly reminiscent of Shah politics prior to the rise of Rana 



81 



Nepal and Bhutan: Country Studies 

rule (see The Democratic Experiment, ch. 1). He also reconstitut- 
ed the system of palace patronage, replacing the system of Rana 
patronage. The Ranas, however, firmly controlled the armed forces 
(see Armed forces and Society, ch. 5). 

In December 1960, King Mahendra launched a palace coup 
against the popularly elected government of Prime Minister Bish- 
weshwar Prasad (B.P.) Koirala and reestablished his absolute 
monarchical rule under the banner of the partyless panchayat (see 
Glossary) system (see Political Dynamics, ch. 4). Until early 1990, 
the panchayat system, strictly controlled by the palace, remained 
firmly in place. The transition to a new social order was stymied; 
society remained entrenched in a feudalistic structure. 

There was, however, a tide of Western popular culture and com- 
mercialization sweeping over Nepal. In the 1960s and 1970s, many 
Westerners, so-called hippies, were attracted to Nepal, looking for 
inexpensive marijuana and hashish. Nepal suddenly emerged as 
a "hippie Shangri-la. ' ' There were no laws or legal restrictions on 
the sale and purchase of such drugs, and they could be used openly. 
In fact, some Westerners thought the Nepalese were generally happy 
and content because they were always high. Although this view 
was a distortion, nonetheless it was very common to see elderly 
Nepalese men smoking marijuana, invariably mixed with tobac- 
co, in public. Marijuana plants grew almost everywhere; some- 
times they were found growing even along main streets. Locally 
produced hashish also was widely consumed, particularly during 
festivals celebrated by some ethnic groups and tribes. It was, 
however, very unusual for a Nepalese to develop a marijuana or 
hashish habit until reaching about forty years of age. 

By the late 1980s, the situation had changed dramatically. There 
was an emerging drug subculture in the urban areas, and a num- 
ber of youths, including college and high school students, sold and 
consumed drugs. Many of these youths had gone beyond using 
marijuana and hashish to more potent drugs, such as "crack" and 
cocaine — drugs unheard of in the past. In the 1960s, Westerners 
had sought release from the overbearing materialism of developed 
countries; they copied the Nepalese (and other Easterners) who 
smoked marijuana and hashish. Ironically, in the 1980s and 1990s, 
it was Nepalese youths who were enchanted by the North Ameri- 
can material and drug culture. There were an estimated 20,000 
heroin addicts in 1989. In response to the drug situation in the coun- 
try, in the late 1980s the government initiated antinarcotics mea- 
sures and narcotics training, and King Birendra Bir Bikram Shah 
Dev directed extensive media attention to narcotics abuse. The 



82 



Nepal: The Society and Its Environment 

effectiveness of the battle against narcotics, however, was limited 
by the lack of an official government body to target drug abuse. 

Rural Society and Kinship 

Nepal in the early 1990s was predominantly a rural-agricultural 
society, where more than 90 percent of the people lived in rural 
areas and depended on farming as a source of livelihood. Even in 
settlements designated as urban areas, the rural-urban distinction 
easily was blurred; approximately 50 percent of urbanites outside 
the three cities in the Kathmandu Valley were engaged in farm- 
ing for their livelihood. Even in the Kathmandu Valley cities, 30 
to 40 percent of city dwellers were agriculturalists. In this sense, 
most urban areas were economic extensions of rural areas, but with 
an urban manifestation and a commercial component. Farming 
was the dominant order of society and the mainstay of the econo- 
my, a situation that was unlikely to change, given the extremely 
sluggish pace of economic transformation. 

The basic social unit in a village was the family, or paribar, con- 
sisting of a patrilineally extended household. The extended family 
system should not, however, be construed as a necessarily harmoni- 
ous form of village life. Many extended families broke apart as sons 
separated from parents and brothers from each other. At the time 
of separation, the family property was equally divided among the 
sons. If parents were alive, they each received a share. Family sepa- 
ration generally occurred in cases where the head of the household 
was less assertive and domineering, when the father died, or when 
all the sons married. Unmarried sons normally did not separate 
from their parents; if the parents were deceased, unmarried sons 
usually stayed with their older brothers. Because family separa- 
tion always resulted in a division of family landholdings, landhold- 
ings were extremely fragmented, both geographically and socially. 
Sometimes, family separation and resulting land fragmentation 
turned into a bitter feud and led to legal disputes. 

Beyond the immediate family, there existed a larger kinship net- 
work that occasionally involved sharing food. This network also 
was an important means of meeting farm labor needs, especially 
during the planting and harvesting seasons, when labor shortages 
were common. 

Above the kinship network was the village, which functioned as 
a broader unit of social existence. Some villages were no more than 
hamlets made up of just a few houses; others were sizable commu- 
nities of several neighboring hamlets. In more populous villages, 
the caste groups contained occupational low (untouchable) caste 
groups, such as the Kami (ironsmiths who make tools), the Sarki 



83 



Nepal and Bhutan: Country Studies 

(leathersmiths), and the Damai (tailors and musicians), who ful- 
filled the vital basic needs of the village as a fairly self-contained 
production unit. 

Villagers occasionally pooled their resources and labored together 
to implement village-level projects, such as building irrigation 
ditches, or channels, or facilities for drinking water. If a house- 
hold could afford to hire farm labor, it usually relied on the mutual 
labor- sharing system called parma, which allowed villagers to ex- 
change labor for labor at times of need. 

Although farming traditionally ranked among the most desirable 
occupations, villagers frequently encouraged some of their children 
to leave in search of civil service, army, and other employment 
opportunities. Individual migration was often the result of a family 
decision and an important economic strategy; it not only served 
as a safety valve for growing population pressures but also gener- 
ated cash incomes, thereby averting any undue economic crises 
in the family. Well-to-do village families usually pushed their chil- 
dren to obtain civil service jobs as a means of climbing the 
bureaucratic ladder and of developing valuable connections with 
the elite political structure. 

Farming was the most important source of livelihood in rural 
areas, but the scarcity of land placed severe constraints on agricul- 
tural development. Landholding was the most important basis for, 
or criterion of, socioeconomic stratification. The 1981 agricultur- 
al census data identifies five classes of peasantry: landless and nearly 
landless, people with no land or less than half a hectare; subsistence, 
those with half a hectare to one hectare; small, holders of one to 
three hectares; medium, people with three to five hectares; and 
large, farmers of more than five hectares (see table 8, Appendix). 

In terms of production relations, the first two classes were de- 
pendent on large landowners for survival. Small landowners, on 
the other hand, were relatively independent; they did not have to 
depend on the large landowning class for survival, especially if they 
were involved in circular migration as a source of supplementary 
cash income. Nor did they regularly employ members of the first 
two classes. Landowners of medium- sized plots were independent 
of large landowners. Their engagement in wage laboring or tenancy 
farming was sporadic, if present at all. In some cases, they em- 
ployed others during peak farming seasons. The large landown- 
ing class regularly employed farm workers and benefited from the 
existence of excess labor, which kept wages low. In general, the 
situation of landholders was exacerbated by the archaic nature of 
farming technology and the absence of other resources. It there- 
fore was not surprising that rural poverty was widespread. 



84 



A deforested area, 
a typical scene in Nepal 



Demands for fuelwood 
and fodder contribute to 
the deforestation problem. 

Courtesy United States 
Agency for International 
Development 




85 



Nepal and Bhutan: Country Studies 

Women's Status and Role in Society 

The United Nations has defined the status of women in the con- 
text of their access to knowledge, economic resources, and politi- 
cal power, as well as their personal autonomy in the process of 
decision making. When Nepalese women's status is analyzed in 
this light, the picture is generally bleak. In the early 1990s, Nepal 
was a rigidly patriarchical society. In virtually every aspect of life, 
women were generally subordinate to men. 

Women's relative status, however, varied from one ethnic group 
to another. The status of women in Tibeto-Nepalese communities 
generally was relatively better than that of Pahari and Newari wom- 
en. Women from the low caste groups also enjoyed relatively more 
autonomy and freedom than Pahari and Newari women. 

The senior female member played a commanding role within the 
family by controlling resources, making crucial planting and har- 
vesting decisions, and determining the expenses and budget allo- 
cations. Yet women's lives remained centered on their traditional 
roles — taking care of most household chores, fetching water and 
animal fodder, and doing farm work. Their standing in society was 
mostly contingent on their husbands' and parents' social and eco- 
nomic positions. They had limited access to markets, productive ser- 
vices, education, health care, and local government. Malnutrition 
and poverty hit women hardest. Female children usually were given 
less food than male children, especially when the family experienced 
food shortages. Women usually worked harder and longer than men. 
By contrast, women from high-class families had maids to take care 
of most household chores and other menial work and thus worked 
far less than men or women in lower socioeconomic groups. 

The economic contribution of women was substantial, but largely 
unnoticed because their traditional role was taken for granted. When 
employed, their wages normally were 25 percent less than those paid 
to men. In most rural areas, their employment outside the house- 
hold generally was limited to planting, weeding, and harvesting. 
In urban areas, they were employed in domestic and traditional jobs, 
as well as in the government sector, mostly in low-level positions. 

One tangible measure of women's status was their educational 
attainment. Although the constitution offers women equal educa- 
tional opportunities, many social, economic, and cultural factors 
contributed to lower enrollment and higher dropout rates for girls. 
Illiteracy imposed the greatest hindrance to enhancing equal oppor- 
tunity and status for women. They were caught in a vicious circle 
imposed by the patriarchical society. Their lower status hindered 



86 



Nepal: The Society and Its Environment 

their education, and the lack of education, in turn, constricted their 
status and position (see Education since 1951, this ch.). Although 
the female literacy rate has improved noticeably over the years, 
the level in the early 1990s fell far short of the male level. 

The level of educational attainment among female children of 
wealthy and educated families was much higher than that among 
female children of poor families. This class disparity in education- 
al attainment was also true for boys. In Nepal, as in many socie- 
ties, education was heavily class-biased (see Education, this ch.). 

In the early 1990s, a direct correlation existed between the level 
of education and status. Educated women had access to relatively 
high-status positions in the government and private service sec- 
tors, and they had a much higher status than uneducated women. 
This general rule was more applicable at the societal level than at 
the household level. Within the family, an educated woman did 
not necessarily hold a higher status than her uneducated counter- 
part. Also within the family, a woman's status, especially a 
daughter-in-law's status, was more closely tied to her husband's 
authority and to her parental family's wealth and status than any- 
thing else. 

Social Classes and Stratification 

In terms of differences in wealth and access to political power, 
Nepalese society could be divided into a small ruling elite; a grow- 
ing, intermediate-sized group of government officials, large land- 
holders, and merchants; and the vast majority of the population, 
consisting of a peasant base. These divisions are descriptive, func- 
tional class categories rather than social class entities based on the 
Marxian concept of the social relations of production. In a way, 
all three classes were a long continuum in Nepal's social structure 
because most members of the ruling elite and government func- 
tionaries had their direct roots in the rural landed class, which was 
one stratum of the farming population. 

Even though the agricultural sector as a whole faced similar eco- 
nomic and technological circumstances, it was diverse and contained 
several strata in landholding, relative economic dependence, and 
independence (see Rural Society and Kinship, this ch.). The nu- 
merically small intermediate stratum of the farmers was only slighdy 
less diverse than the rest of the rural population in terms of mem- 
bers' ethnic and geographical backgrounds. The relative econom- 
ic and educational advantages of this group and its occupational 
activities, however, made its members relatively homogeneous in 
terms of shared interest. They generally aspired to achieve a middle- 
or elite-class status. 



87 



Nepal and Bhutan: Country Studies 

The smallest and least diverse of the three categories was the 
ruling elite, largely composed of high-caste, educated Paharis, 
namely different strata of Brahmans and Chhetris. At the zenith 
of this class was the monarch, whose authority was derived from 
the orthodox Hindu contention that the king was the reincarna- 
tion of Vishnu, whose assigned role in the Hindu trinity is protec- 
tion. The monarch's authority was not based on electoral support. 

The continued expansion of the bureaucracy was a direct response 
to a consistent increase in the educated population. Because of the 
lack of development, a large number of educated people failed to 
find gainful employment upon graduation. Because they constituted 
the most potent revolutionary force, and happened to be geographi- 
cally concentrated in urban centers, the ruling class was almost com- 
pelled to absorb them into an already bloated bureaucracy in order 
to neutralize any sociopolitical disturbance they might cause. 

In the 1980s, a significant number of college- and university- 
educated people residing in Kathmandu Valley cities discovered 
a second employment outlet. Development consultant firms and 
associated services have emerged throughout Kathmandu. Because 
of the growing pressure on foreign donors to hire Nepalese con- 
sultants for development feasibility and evaluation projects, these 
firms were able to tap into the large pool of foreign aid money and 
have generated a significant number of jobs. This opportunity has 
allowed many of the more educated to attain middle class status. 

Religion 

Religion and Society 

Religion occupies an integral position in Nepalese life and soci- 
ety. In the early 1990s, Nepal was the only constitutionally declared 
Hindu state in the world; there was, however, a great deal of in- 
termingling of Hindu and Buddhist beliefs. Many of the people 
regarded as Hindus in the 1981 census could, with as much justifi- 
cation, be called Buddhists. The fact that Hindus worshipped at 
Buddhist temples and Buddhists worshipped at Hindu temples has 
been one of the principal reasons adherents of the two dominant 
groups in Nepal have never engaged in any overt religious con- 
flicts. Because of such dual faith practices (or mutual respect), the 
differences between Hindus and Buddhists have been in general 
very subtle and academic in nature. However, in 1991, approxi- 
mately 89.5 percent of the Nepalese people identified themselves 
as Hindus. Buddhists and Muslims comprised only 5.3 and 2.7 
percent, respectively. The remainder followed other religions, in- 
cluding Christianity. 



88 




89 



Nepal and Bhutan: Country Studies 

The geographical distribution of religious groups revealed a 
preponderance of Hindus, accounting for at least 87 percent of the 
population in every region. The largest concentrations of Bud- 
dhists were found in the eastern hills, the Kathmandu Valley, and 
the central Tarai; in each area about 10 percent of the people were 
Buddhist. Buddhism was relatively more common among the 
Newar and Tibeto-Nepalese groups. Among the Tibeto-Nepalese, 
those most influenced by Hinduism were the Magar, Sunwar, and 
Rai peoples. Hindu influence was less prominent among the 
Gurung, Limbu, Bhote, and Thakali groups, who continued to 
employ Buddhist monks for their religious ceremonies. 

Hinduism 

Hinduism generally is regarded as the oldest formal religion in 
the world. The origins of Hinduism go back to the pastoral Aryan 
tribes, spilling over the Hindu Kush from Inner Asia, and mixing 
with the urban civilization of the Indus Valley and with the tribal 
cultures of hunting and gathering peoples in the area. Unlike other 
world religions, Hinduism had no single founder and has never 
been missionary in orientation. It is believed that about 1200 B.C., 
or even earlier by some accounts, the Vedas, a body of hymns 
originating in northern India were produced; these texts form the 
theological and philosophical precepts of Hinduism. 

Hindus believe that the absolute (the totality of existence, in- 
cluding God, man, and universe) is too vast to be contained with- 
in a single set of beliefs. A highly diverse and complex religion, 
Hinduism embraces six philosophical doctrines (darshanas). From 
these doctrines, individuals select one that is congenial, or conduct 
their worship simply on a convenient level of morality and obser- 
vance. Religious practices differ from group to group. The aver- 
age Hindu does not need any systematic formal creed in order to 
practice his or her religion. Hindus need only to comply with the 
customs of their family and social groups. 

One basic concept in Hinduism is that of dharma, natural law 
and the social and religious obligations it imposes. It holds that 
individuals should play their proper role in society as determined 
or prescribed by their dharma. The caste system, although not es- 
sential to philosophical Hinduism, has become an integral part of 
its social or dharmic expression. Under this system, each person 
is born into a particular caste, whose traditional occupation — 
although members do not necessarily practice it — is graded accord- 
ing to the degree of purity and impurity inherent in it. 

Other fundamental ideas common to all Hindus concern the na- 
ture and destiny of the soul, and the basic forces of the universe. 



90 



Nepal: The Society and Its Environment 

The souls of human beings are seen as separated portions of an 
all-embracing world soul (brahma); man's ultimate goal is reunion 
with this absolute. 

Karma (universal justice) is the belief that the consequence of 
every good or bad action must be fully realized. Another basic con- 
cept is that of samsara, the transmigration of souls; rebirth is re- 
quired by karma in order that the consequences of action be fulfilled. 
The role an individual must play throughout his or her life is fixed 
by his or her good and evil actions in previous existences. It is only 
when the individual soul sees beyond the veil of maya (illusion or 
earthly desires) — the forces leading to belief in the appearances of 
things — that it is able to realize its identity with the impersonal, 
transcendental reality (world soul) and to escape from the other- 
wise endless cycle of rebirth to be absorbed into the world soul. 
This release is known as moksha. 

Veneration for the cow has come to be intimately associated with 
all orthodox Hindu sects. Because the cow is regarded as the sym- 
bol of motherhood and fruitfulness, the killing of a cow, even ac- 
cidentally, is regarded as one of the most serious of religious 
transgressions. 

Hinduism is polytheistic. It incorporates many gods and god- 
desses with different functions and powers; but in the most impor- 
tant and widely held doctrine, the Vedanta, gods and goddesses 
are considered merely different manifestations or aspects of a sin- 
gle underlying divinity. This single divinity is expressed as a Hin- 
du triad comprising the religion's three major gods: Brahma, 
Vishnu, and Shiva, personifying creation, preservation, and de- 
struction, respectively. Vishnu and Shiva, or some of their numer- 
ous avatars (incarnations), are most widely followed. 

Buddha, the founder of Buddhism, is regarded as the ninth avatar 
of Vishnu. Some Hindus identify Christ as the tenth avatar; others 
regard Kalki as the final avatar who is yet to come. These avatars 
are believed to descend upon earth to restore peace, order, and 
justice, or to save humanity from injustice. The Mahabharata (com- 
piled by the sage Vyasa, probably before A.D. 400), describes the 
great civil war between the Pandavas (the good) and the Kaura- 
vas (the bad) — two factions of the same clan. It is believed that 
the war was created by Krishna. Perhaps the flashiest and crafti- 
est avatar of Vishnu, Krishna, as a part of his lila (sport or act), 
is believed motivated to restore justice — the good over the bad. 

Buddhism 

Buddhism had its origin in the teachings of Siddhartha Gauta- 
ma, a Kshatriya caste prince of the Sakya clan; he was born in 



91 



Nepal and Bhutan: Country Studies 

Lumbini, in the central Tarai Region, about 563 B.C. His father 
was the ruler of a minor principality in the region. Born a Hindu 
and educated in the Hindu tradition, Siddhartha Gautama renounced 
worldly life at about the age of twenty-nine and spent the next six 
years in meditation. At the end of this time, he attained enlight- 
enment; thereafter, known as the Buddha, or the Enlightened One, 
he devoted the remainder of his life to preaching his doctrine. 

The Buddha accepted or reinterpreted the basic concepts of Hin- 
duism, such as karma, samsara, dharma, and moksha, but he gener- 
ally refused to commit himself to specific metaphysical theories. 
He said they were essentially irrelevant to his teachings and could 
only distract attention from them. He was interested in restoring 
a concern with morality to religious life, which he believed had 
become stifled in details of ritual, external observances, and 
legalisms. 

The Four Noble Truths summarize the Buddha's analysis of the 
human situation and the solution he found for the problems of life. 
The first truth is that life, in a world of unceasing change, is in- 
herently imperfect and sorrowful, and that misery is not merely 
a result of occasional frustration of desire or misfortune, but is a 
quality permeating all experience. The second truth is that the cause 
of sorrow is desire, the emotional involvement with existence that 
led from rebirth to rebirth through the operation of karma. The 
third truth is that the sorrow can be ended by eliminating desire. 
The fourth truth sets forth the Eightfold Path leading to elimina- 
tion of desire, rebirth, and sorrow, and to the attainment of nir- 
vana or nibbana (see Glossary), a state of bliss and selfless 
enlightment. It rejoins right or perfect understanding, aspiration, 
speech, action, livelihood, effort, thought, and contemplation. 

Education 

Education under Rana Rule 

The Rana rulers, who placed Nepal under their feudal yoke for 
about 100 years until the beginning of the 1950s, feared an edu- 
cated public. This fear also was held by Prime Minister Chandra 
Shamsher Rana, who established Tri-Chandra College in 1918 and 
named it after himself. During the inauguration of the college, 
Chandra Shamsher lamented that its opening was the ultimate death 
knell to Rana rule. He personally felt responsible for the downfall 
of Rana rule, and his words became prophetic for the crumbling 
of Rana political power in 1950-51. 

The privileged access of members of the higher castes and wealthi- 
er economic strata to education was for centuries a distinguishing 



92 



Nepal: The Society and Its Environment 

feature of society. The Ranas kept education the exclusive preroga- 
tive of the ruling elite; the rest of the population remained largely 
illiterate. The Ranas were opposed to any form of public schooling 
for the people, although they emphasized formal instruction for 
their own children to prepare them for a place in the government. 

The founder of the Rana regime, Jang Bahadur Kunwar, later 
known as Jang Bahadur Rana, decided to give his children an En- 
glish education rather than the traditional religiously oriented train- 
ing. In 1854 Jang Bahadur engaged an English tutor to hold classes 
for his children in the Rana palace. This act tipped the balance 
in favor of English education and established its supremacy over 
the traditional type of Sanskrit-based education. In 1991 English 
education still carried a higher status and prestige than did tradi- 
tional education. 

Jang Bahadur's successor opened these classes to all Rana chil- 
dren and formally organized them into Durbar High School. A 
brief shift in government education policy came in 1901, when 
Prime Minister Dev Shamsher Rana took office and called for 
sweeping education reforms. He proposed a system of universal 
public primary education, using Nepali as the language of instruc- 
tion and opening Durbar High School to children who were not 
members of the Rana clan. Dev Shamsher' s policies were so un- 
popular that he was deposed within a few months. His call for re- 
forms did not entirely disappear, however. A few Nepali-language 
primary schools in the Kathmandu Valley, the Hill Region, and 
the Tarai remained open, and the practice of admitting a few 
middle- and low-caste children to Durbar High School continued. 

Before World War II (1939-45), several new English middle and 
high schools were founded in Patan, Biratnagar, and elsewhere, 
and a girls' high school was opened in Kathmandu. In the villages, 
public respect for education was increasing, largely as a result of 
the influence of returning Gurkha soldiers, many of whom had 
learned to read and write while serving in the British army. Some 
retired soldiers began giving rudimentary education to children in 
their villages. Some members of the high-caste, elite families sent 
their children to Patna University, Banaras Hindu University, or 
other universities in India for higher academic or technical train- 
ing. It was in fact, some of these students, having realized how 
oppressive the policies of Rana rule were, who initiated anti-Rana 
movements, provided revolutionary cadres, and finally began the 
revolution that ultimately led to the overthrow of Rana rule in 1951 . 

Before the 1950-51 revolution, Nepal had 310 primary and mid- 
dle schools, eleven high schools, two colleges, one normal school, 
and one special technical school. In the early 1950s, the average 



93 



Nepal and Bhutan: Country Studies 

literacy rate was 5 percent. Literacy among males was 10 percent 
and among females less than 1 percent. Only 1 child in 100 at- 
tended school. 

Education since 1951 

After the 1951 revolution, efforts were made to establish an edu- 
cation system. The National Education Planning Commission was 
founded in 1954, the All Round National Education Committee 
in 1961, and the National Education Advisory Board in 1968 in 
order to implement and to refine the education system. In 1971 
the New Education System came into operation as an integral part 
of the Fourth Five- Year Plan (1970-75); it was designed to address 
individual, as well as societal, needs in concert with the goals of 
national development (see The Five-Year Plans, ch. 3). 

Formal schooling in modern times was still constrained by the 
economy and culture. Children were generally needed to work in 
the fields and at home. Many students began school late (at ages 
nine or ten); more than half left school after completing only one 
year. Educating females was viewed as unnecessary; as a conse- 
quence, their enrollment levels were far lower than those of males. 
Regional variations often hindered the effectiveness of uniform text 
materials and teacher training. Although the government was rela- 
tively successful in establishing new schools, the quality of educa- 
tion remained low, particularly in remote regions where the majority 
of the population lived. Terrain further inhibited management and 
supervision of schools. 

Most schools operated for ten months of the year, five and one- 
half days a week. In the warmer regions, June and July were va- 
cation months; in the northern regions, mid-December through 
mid- February were vacation months. All schools in Kathmandu 
closed for winter vacation. 

In 1975 primary education was made free, and the government 
became responsible for providing school facilities, teachers, and 
educational materials. Primary schooling was compulsory; it be- 
gan at age six and lasted for five years. Secondary education be- 
gan at age eleven and lasted another five years in two cycles — two 
years (lower) and three years (higher). Total school enrollment was 
approximately 52 percent of school-age children (approximately 
70 percent of school-age boys, 30 percent of school-age girls) in 
1984. Secondary school enrollment was only 18 percent of the rele- 
vant age-group (27 percent of the total boys, 9 percent of the total 
girls). About 72 percent of all students were male. The Ministry 
of Education supervised the finance, administration, staffing, and 



94 



A house in the Makalu area of the Mountain Region, near Khandbari 

An open dwelling in Thumlingtar 
Courtesy Linda Galantin 



95 



Nepal and Bhutan: Country Studies 

inspection of government schools. It also inspected private schools 
that received government subsidies. 

As of 1987, Nepal had 12,491 primary schools, 3,824 lower- 
secondary schools, and 1,501 higher- secondary schools. There were 
55,207 primary, 11,744 lower- secondary, and 8,918 higher- 
secondary school teachers. Primary school enrollments totaled 
1,952,504 persons; lower-secondary and higher- secondary enroll- 
ment figures stood at 289,594 and 289,923 persons, respectively. 

Curriculum was greatly influenced by United States models, and 
it was developed with assistance from the United Nations Educa- 
tional, Scientific, and Cultural Organization. The National Edu- 
cation Plan established a framework for universal education. The 
goal of primary education was to teach reading, writing, and arith- 
metic, and to instill discipline and hygiene. Lower- secondary edu- 
cation emphasized character formation, a positive attitude toward 
manual labor, and perseverance. Higher-secondary education 
stressed manpower requirements and preparation for higher edu- 
cation. National development goals were emphasized through the 
curriculum. 

The School Leaving Certificate examination, a nationally ad- 
ministered and monitored high-school-matriculation examination, 
was given after completion of the higher- secondary level. Those 
who passed this examination were eligible for college. In addition, 
some communities had adult education schools. 

In the early 1980s, approximately 60 percent of the primary 
school teachers and 35 percent of secondary school teachers were 
untrained, despite the institution of a uniform method of training 
in 1951. The Institute of Education, part of Tribhuvan Universi- 
ty, was responsible for inservice and preservice teacher training 
programs. Beginning in 1976, the institute organized a distance- 
learning program — electronic links between distant locations — for 
prospective teachers. Developments in telecommunications will pro- 
vide new educational options. 

At the higher education level, there was only one doctoral degree- 
granting institution in Nepal, Tribhuvan University. It was named 
after King Tribhuvan Bir Bikram Shah, the grandfather of King 
Birendra, and was chartered in 1959. All public colleges fell under 
Tribhuvan University. Private colleges were operated independent- 
ly, although they also were required to meet the requirements and 
standards set by Tribhuvan University. The total number of col- 
leges increased significantly, from 8 in 1958 to 132 in 1988 (69 under 
Tribhuvan University and 63 private colleges). In terms of sub- 
jects, these colleges covered a wide range of disciplines, such as 
social sciences; humanities; commerce (business); physical sciences, 



96 



Nepal: The Society and Its Environment 

including some medical sciences; engineering; education; forestry; 
law; and Sanskrit. The number of students enrolled in higher edu- 
cation institutions totaled almost 83,000 in 1987; the largest per- 
centage was in humanities and social sciences (40 percent), followed 
by commerce (31 percent), science and technology (11 percent), 
and education (6 percent). Approximately 20 percent of the stu- 
dents enrolled in Tribhuvan University were females. 

The 1981 census found 24 percent of the population to be liter- 
ate; as of 1990, the literacy rate was estimated to be 33 percent. 
There still was a big gap between male and female literacy rates. 
About 35 percent of the male population was literate in 1981, but 
only 11.5 percent of the female population was. A gulf also existed 
in literacy rates between rural and urban areas. In rural areas, the 
literacy rates for males and females were 33 percent and 9 percent, 
respectively; in urban areas, they were significantly higher, 62 per- 
cent and 37 percent, respectively. The higher literacy rates in ur- 
ban areas were largely attributed to the availability of more and 
better educational opportunities, a greater awareness of the need 
for education for employment and socioeconomic mobility, and the 
exodus of educated people from rural to urban areas. Nepal 
launched a twelve-year literacy program in 1990, targeting 8 mil- 
lion people between the ages of six and forty-five. 

There was little doubt among observers that the historical mo- 
nopoly of educational opportunity by members of the wealthier and 
higher caste groups gradually was diminishing. Schools and col- 
leges were open to all, and enrollment figures were rising rapidly. 
The long-standing prejudice against the education of women seemed 
to be very slowly breaking down, as attested to by increasing en- 
rollments of girls in schools and colleges. Yet two distinct biases — 
social class and geography — remained pronounced in educational 
attainment. 

Despite general accessibility, education still nonetheless primarily 
served children of landlords, businessmen, government leaders, or 
other elite members of the society, for they were the only ones who 
could easily afford to continue beyond primary school. They also 
were far more able to afford, and likely to continue, education be- 
yond the high school level. Many students in the general popula- 
tion dropped out before they took the School Leaving Certificate 
examination. There was an even more important ingredient for 
success after leaving school: if the quality of available higher edu- 
cation was considered inadequate or inferior, higher caste fami- 
lies could afford to send their children overseas to obtain necessary 
degrees. Foreign educational degrees, especially those obtained from 
United States and West European institutions, carried greater 



97 



Nepal and Bhutan: Country Studies 

prestige than degrees from Nepal. Higher caste families also had 
the necessary connections to receive government scholorships to 
study abroad. 

Further, education remained largely urban-biased. The majority 
of education institutions, particularly better quality institutions, 
were found in urban areas. In rural areas where schools were set 
up, the quality of instruction was inferior, facilities were very poor, 
and educational materials were either difficult to find or virtually 
unavailable. Consequently, if rural families were serious about the 
education of their children, they were forced to send them to ur- 
ban areas, a very expensive proposition that the vast majority of 
rural households could not afford. 

Although there has been a remarkable numerical growth in the 
literacy rates, as well as the number of education institutions over 
the years, the quality of education has not necessarily improved. 
There were few top-notch teachers and professors, and their morale 
was low. At the higher educational level, the research focus or tra- 
dition was virtually absent, largely because there were few research 
facilities available for professors. There were some excellent pri- 
vate schools, mostly located in the Kathmandu Valley, but many 
appeared to be merely money-making ventures rather than seri- 
ous, devoted educational enterprises. The large majority of schools 
and colleges were run by poorly prepared and poorly trained 
teachers and professors. Schools and colleges frequently were closed 
because of strikes. Students had little respect for teachers and profes- 
sors and were concerned with obtaining a certificate rather than 
a quality education. Cheating was rampant during examinations 
at all levels. 

Health 

Health-care problems were varied and enormous. Health and 
health-care facilities were generally poor and directly reflected the 
mode of life. The majority of people lived in mass poverty and depri- 
vation, while the nation's small wealth was concentrated in the 
hands of a few. Deprivation was apparent in the pervasiveness of 
poor nutrition and sanitation, inadequate housing for most fami- 
lies, and the general absence of modern medical care and other 
social services, especially in rural areas. The rich lived compara- 
tively well but also shared such common problems as the lack of 
an abundant and clean water supply, and the prevalence of disease. 

Diseases and Disease Control 

Poor health conditions were evident in the high rate of infant 
mortality and a short life expectancy. In the mid-1960s, a national 



98 



Stone sculpture of Ugrachandi Durga, with eighteen arms, 

Bhaktapur Durbar Square 
Courtesy Linda Galantin 



99 



Nepal and Bhutan: Country Studies 



health survey was conducted. In 1991 that survey was still consid- 
ered the major comprehensive published source of information on 
the national public health situation. 

A number of diseases and chronic infections were prevalent. Goi- 
ter, a disease directly associated with iodine deficiency, was en- 
demic in certain villages in the hills and mountains. In most of 
the villages surveyed, more than half of the population had goiter, 
and in these same villages the incidence of deafness and mental 
retardation was much higher than in other villages. Leprosy also 
was a serious problem. Foreign assistance, specifically through 
Christian missions, was responsible for setting up leprosy treat- 
ment centers in different parts of the country. Tuberculosis has 
been a chronic problem and was more common in urban areas. 
During the 1970s, the Tuberculosis Control Project was established 
to provide immunizations to all children younger than fifteen, and 
it is likely that this project has reduced tuberculosis. Other chronic, 
widespread problems were intestinal parasites, diarrhea, and gastro- 
intestinal disorders. Some polio and typhoid infections were com- 
mon but not severe. 

Malnutrition was a chronic problem, especially in rural areas. 
More than 50 percent of the children surveyed were reported to 
have stunted growth. "Wasting," defined as a condition in which 
a child has very low weight for his or her height, was also evident. 
These conditions were particularly bad in the Hill and Mountain 
regions, both of which suffered from food shortages. The coun- 
try's public health program, however, has essentially eliminated 
smallpox and has been able to control malaria, which used to be 
endemic to the Tarai Region and other lowlands. 

Health-Care Facilities 

The health-care delivery network in Nepal was poorly developed. 
Health-care practices in the country could be classified into three 
major categories: popular folk medical care, which relied on a jhankri 
(medicine man or shaman); Ayurvedic treatment; and allopathic 
(modern) medicine. These practices were not necessarily exclusive; 
most people used all three, sometimes even simultaneously, depend- 
ing on the type of illness and the availability of services. 

Popular folk medicine derived from a large body of commonly 
held assumptions about magical and supernatural causes of illness. 
Sickness and death often were attributed to ghosts, demons, and 
evil spirits, or they were thought to result from the evil eye, plane- 
tary influences, or the displeasures of ancestors. Many precautions 
against these dangers were taken, including the wearing of charms 
or certain ornaments, the avoidance of certain foods and sights. 



100 



Nepal: The Society and Its Environment 

and the propitiation of ghosts and gods with sacrificial gifts. When 
illness struck or an epidemic threatened, people went to see a.jhankri 
for treatment. Such pseudomedical practices were ubiquitous; in 
many parts of Nepal, ajhankri was the only source of medical care 
available. Nepalese also regularly saw jotishi (Brahman astrologers) 
for counseling because they believed in planetary influence on their 
lives, resulting from disalignments of certain planetary signs. Jotishi 
were commonly relied on even in urban areas, and even by those 
who were well educated and frequently used modern medicine. 
And, virtually no arranged marital union was proposed and con- 
cluded without first consulting a. jotishi. 

The Ayurvedic system of medicine was believed to have evolved 
among the Hindus about 2,000 years ago. It originally was based 
on the Ayur- Veda (the Veda of Long Life), but a vast literature since 
has accumulated around this original text. According to the 
Ayurvedic theory, the body, like the universe, consists of three 
forces — phlegm, bile, and wind — and physical and spiritual well- 
being rests on maintaining the proper balance among these three 
internal forces. A harmonious existence between body and mind 
results. Ayurvedic pharmacopoeia — based on medicinal plants, 
plant roots, and herbs — remained a major source of medical treat- 
ment in Nepal. This school of medical practice also applies the hot- 
and-cold concept of foods and diets. In the late 1980s, there were 
nearly 280 practicing Ayurvedic physicians, popularly known as 
vaidhya; 145 Ayurvedic dispensaries; and a national college of 
Ayurvedic medicine in Kathmandu. 

In 1991 the most commonly used form of medical treatment, 
especially for major health problems, was modern medicine 
whenever and wherever accessible. Within the domain of modern 
medicine, providing public health-care facilities was largely the 
responsibility of the government. Private facilities also existed in 
various regions. Modern medical service generally was provided 
by trained doctors, paramedics, nurses, and other community health 
workers. The government-operated health-care delivery system con- 
sisted of hospitals and health centers, including health posts in rural 
areas. 

Hospitals were located mostly in urban areas and provided a 
much wider range of medical services than health centers. They 
were attended by doctors, as well as by nurses, and equipped with 
basic laboratory facilities. Small health centers and posts in rural 
areas — most of them staffed by paramedical personnel, health aides, 
and other minimally trained community health workers — served 
the needs of the scattered population. Even though these rural fa- 
cilities were more accessible than urban hospitals, they generally 



101 



Nepal and Bhutan: Country Studies 

failed to provide necessary services on a regular and consistent basis. 
The majority of them were barely functional because of such 
problems as inadequate funding; lack of trained staff; absentee- 
ism; and chronic shortages of equipment, medicines, and vaccines. 

Nepal had a total of 123 hospitals, eighteen health centers, and 
816 health posts in 1990. There was one hospital bed for every 4,283 
persons, an improvement since 1977, when there was one hospital 
bed for every 6,489 persons. The number of doctors totaled 879 
in 1988, or one physician available for about 20,000 people. For 
the same period, other medical personnel included 601 nurses, 2,062 
assistant nurses and midwives, 2,790 senior and assistant auxiliary 
health workers and health assistants, and 6,808 village-based health 
workers. 

There was no doubt in the late 1980s that considerable progress 
had been made in health care, but the available facilities were still 
inadequate to meet the growing medical needs of the population. 
The majority of people lacked easy access to modern medical 
centers, partly because of the absence of such facilities in nearby 
locations and partly because of the physical barrier posed by the 
country's rugged terrain. Because there were very few modern 
means of transportation in rural areas, particularly in the hills and 
mountains, people had to walk on average about half a day to get 
to health posts. Such a long walk was not only difficult (especially 
when the patient needed medical attention), but also meant eco- 
nomic hardship for the majority who rarely could afford to be ab- 
sent for the whole day from their daily work. As a result, many 
minor illnesses went untreated, and some of them later developed 
into major illnesses. 

In the early 1990s, Nepal's geographical limitations continued 
to play a large part in the country's social and economic problems. 
Moreover, despite twenty-five years of family planning programs, 
the population growth rate continued to outpace agricultural 
production and parts of the country continued to be food deficit 
areas. The educational base was also limited; only one-third of the 
population was literate. The generally poor health of the popula- 
tion and a lack of adequate health-care facilities also hindered so- 
cial and economic improvements. 

* * * 

A good source of information on cultural and physical geogra- 
phy, although outdated, is Pradyumna P. Karan's Nepal: A Cul- 
tural and Physical Geography. Barry C. Bishop's Karnali under Stress 
not only provides a good geographic and climatic description of 



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Nepal: The Society and Its Environment 

Nepal, but also covers ethnic history and analyzes the economic 
strategies practiced by the mountain and hill peoples. Although 
Bishop's surveys were conducted in the Karnali region, they ap- 
ply to the entire upland region — hills and mountains — of Nepal. 
Jack D. Ives's and Bruno Messerli's The Himalayan Dilemma is 
another good source of physical geographic information on Nepal; 
sections concerning environmental degradation are particularly 
useful. 

The Population Monograph of Nepal, prepared by the National Plan- 
ning Commission, is a good source of statistics on demographic, 
social, and economic issues. Another publication by the commis- 
sion, The Statistical Year Book of Nepal, 1989, supplies fairly exten- 
sive and up-to-date data on various social and economic variables 
and indicators. Pitamber Sharma's Urbanization in Nepal uses cen- 
sus data from 1952 to 1981 to examine the various aspects of ur- 
banization. 

Badri Prasad Shrestha's An Introduction to Nepalese Economy is some- 
what outdated, but has good background material on the contem- 
porary economic situation. Mahesh Chandra Regmi's^4rc Economic 
History of Nepal, 1846-1901 is an excellent historical treatment of 
the economy, arid his Landowner ship in Nepal is a classic study of 
land tenure. Nanda R. Shrestha's Landlessness and Migration in Nepal 
and Vidya Bir Singh Kansakar's Effectiveness of Planned Resettlement 
Programme in Nepal supply detailed analyses of internal migration 
and land resettlement in the Tarai. (For further information and 
complete citations, see Bibliography.) 



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Chapter 3. Nepal: The Economy 



A Nepalese porter carrying supplies for a trek 



Nepal is one of the poorest countries in the 

world; it was listed as the eleventh poorest among 121 countries 
in 1989. Estimates of its per capita income for 1988 ranged from 
US$158 to US$180. Various factors contributed to the economic 
underdevelopment — including terrain, lack of resource endowment, 
landlocked position, lack of institutions for modernization, weak 
infrastructure, and a lack of policies conducive to development. 

Until 1951 Nepal had very little contact with countries other than 
India, Tibet, and Britain. Movement of goods or people from one 
part of the country to another usually required passage through 
India, making Nepal dependent on trade with or via India. The 
mountains to the north and the lack of economic growth in Tibet 
(China's Xizang Autonomous Region after 1959) meant very lit- 
tle trade was possible with this northern neighbor. 

Prior to 1951, few all-weather roads existed, and the transpor- 
tation of goods was difficult. Goods were able to reach Kathman- 
du by railroad, trucks, and ropeways, but for other parts of the 
country such facilities remained almost non-existent. The lack of 
infrastructure made it hard to expand markets and pursue economic 
growth. Since 1951 Nepal has tried to expand its contacts with other 
countries and to improve its infrastructure, although the lack of 
significant progress was still evident in the early 1990s. 

The effects of being landlocked and of having to transit goods 
through India continued to be reflected in the early 1990s. As a 
result of the lapse of the trade and transit treaties with India in 
March 1989, Nepal faced shortages of certain consumer goods, raw 
materials, and other industrial inputs, a situation that led to a 
decline in industrial production. 

Economic Setting 

Nepal's economy is irrevocably tied to India. Nepal's geographi- 
cal position and the scarcity of natural resources used in the produc- 
tion of industrial goods meant that its economy was subject to 
fluctuations resulting from changes in its relationship with India. 
Trade and transit rights affected the movement of goods and in- 
creased transportation costs, although Nepal also engaged in un- 
recorded border trade with India. Real economic growth averaged 
4 percent annually in the 1980s, but the 1989 trade and transit dis- 
pute with India adversely affected economic progress, and economic 



107 



Nepal and Bhutan: Country Studies 

growth declined to only 1.5 percent that year as the availability 
of imported raw materials for export industries was disrupted. 

The Nepalese rupee (Rs or NRs; for value of the rupee — see 
Glossary) was linked to the Indian rupee. Since the late 1960s, the 
universal currency has been Nepalese, although as of 1991 Indian 
currency still was used as convertible currency. During the trade 
and transit dispute of 1989, however, Kathmandu made converti- 
bility of the Indian rupee more difficult. 

Agricultural domination of the economy had not changed by 
1991 . What little industrial activity there was largely involved the 
processing of agricultural products. Since the 1960s, investment 
in the agricultural sector has not had a parallel effect in produc- 
tivity per unit of land. Agricultural production continued to be in- 
fluenced by weather conditions and the lack of arable land and has 
not always kept pace with population growth (see table 9, Ap- 
pendix). 

Nepal suffered from an underdeveloped infrastructure. This 
problem was exacerbated by a weak public investment program 
and ineffective administrative services. Economic development plans 
sought to improve the infrastructure but were implemented at the 
expense of investment in direct production and resulted in a slow 
growth rate. Further, economic growth did not keep pace with popu- 
lation growth. Largely dependent on agriculture, economic growth 
also was undermined by poor harvests. The growth of public ex- 
penditures during the first half of the 1980s doubled the current 
account deficit of the balance of payments and caused a serious 
decline in international reserves. 

Role of Government 

Government participation (or interference) in the economy was 
very strong, beginning with the Rana period, which lasted from 
the mid-nineteenth century until the mid-twentieth century (see 
Rana Rule, ch. 1). During Rana rule, there were very few indus- 
tries other than the cottage type, and they were under strict govern- 
ment supervision. After the fall of the Ranas in 1950-51, economic 
planning as an approach to development was discussed. Finally, 
in 1956 the First Five- Year Plan (1956-61) was announced. 

The Five- Year Plans 

Economic plans generally strove to increase output and employ- 
ment; develop the infrastructure; attain economic stability; pro- 
mote industry, commerce, and international trade; establish 
administrative and public service institutions to support economic 
development; and introduce labor-intensive production techniques 



108 



Nepal: The Economy 



to alleviate underemployment. The social goals of the plans were 
improving health and education as well as encouraging equitable 
income distribution. Although each plan had different development 
priorities, the allocation of resources did not always reflect these 
priorities. The first four plans concentrated on infrastructure — to 
make it possible to facilitate the movement of goods and services — 
and to increase the size of the market. Each of the five-year plans 
depended heavily on foreign assistance in the forms of grants and 
loans (see Foreign Aid, this ch.). 

The First Five-Year Plan (1956-61) allocated about Rs576 mil- 
lion for development expenditures. Transportation and commu- 
nications received top priority with over 36 percent of the budget 
allocations. Agriculture, including village development and irri- 
gation, took second priority with about 20 percent of budget ex- 
penditures. The plan, which also focused on collecting statistics, 
was not well conceived, however, and resulted in actual expendi- 
tures of about Rs382.9 million — two-thirds the budgeted amount. 
In most cases, targets were missed by a wide margin. For exam- 
ple, although approximately 1,450 kilometers of highways were tar- 
geted for construction, only about 565 kilometers were built. 

After Parliament, which had been established under the 1959 
constitution, was suspended in 1960, the Second Plan failed to 
materialize on schedule. A new plan was not introduced until 1962 
and covered only three years, 1962-65. The Second Plan had ex- 
penditures of almost Rs615 million. Transportation and commu- 
nication again received top priority with about 39 percent of budget 
expenditures. Industry, tourism, and social services were the se- 
cond priority. Although targets again were missed, there were im- 
provements in industrial production, road construction, telephone 
installations, irrigation, and education. However, only the organiza- 
tional improvement area of the target was met. 

The first two plans were developed with very little research and 
a minimal data base. Neither plan was detailed, and both contained 
only general terms. The administrative machinery with which to 
execute these plans also was inadequate. The National Planning 
Commission, which formulated the second plan, noted the difficulty 
of preparing plans in the absence of statistical data. Further, as 
was the case with the first plan, the bulk of the development bud- 
get depended on foreign aid — mostly in the form of grants. The 
failure of these plans was indicated by the government's inability 
to spend the budgeted amounts. 

The Third Five-Year Plan (1965-70) increased the involve- 
ment of local panchayat (see Glossary). It also focused on transport, 



109 



Nepal and Bhutan: Country Studies 

communications, and industrial and agricultural development. To- 
tal planned expenditures were more than Rsl.6 billion. 

The Fourth Five-Year Plan (1970-75) increased proposed ex- 
penditures to more than Rs3.3 billion. Transportation and com- 
munications again were the top priority, receiving 41.2 percent 
of expenditures, followed by agriculture, which was allocated 26 
percent of the budget. Although the third and fourth plans increased 
the involvement of the panchayat in the development process, the 
central government continued to carry most of the responsibilities. 

The Fifth Five-Year Plan (1975-80) proposed expenditures of 
more than Rs8.8 billion. For the first time, the problem of poverty 
was addressed in a five-year plan, although no specific goals were 
mentioned. Top priority was given to agricultural development, 
and emphasis was placed on increasing food production and cash 
crops such as sugar cane and tobacco. Increased industrial produc- 
tion and social services also were targeted. Controlling population 
growth was considered a priority. 

The Sixth Five-Year Plan (1980-85) proposed an outlay of more 
than Rs22 billion. Agriculture remained the top priority; increased 
social services were second. The budget share allocated to trans- 
portation and communication was less than that allocated in the 
previous plan; it was felt that the transportation network had 
reached a point where it was more beneficial to increase spending 
on agriculture and industry. 

The Seventh Five-Year Plan (1985-90) proposed expenditures 
of Rs29 billion. It encouraged private sector participation in the 
economy (less than Rs22 billion) and local government participa- 
tion (Rs2 billion). The plan targeted increasing productivity of all 
sectors, expanding opportunity for productive employment, and 
fulfilling the minimum basic needs of the people. For the first time 
since the plans were devised, specific goals were set for meeting 
basic needs. The availability of food, clothing, fuelwood, drinking 
water, primary health care, sanitation, primary and skill-based edu- 
cation, and minimum rural transport facilities was emphasized. 

Because of the political upheavals in mid- 1990, the new govern- 
ment postponed formulating the next plan. The July 1990 budget 
speech of the minister of finance, however, implied that for the 
interim, the goals of the seventh plan were being followed. 

Foreign aid as a percentage of development averaged around 
66 percent (see table 10, Appendix). The government continually 
failed to use all committed foreign aid, however, probably as a result 
of inefficiency. In the Rs26.6 billion budget presented in July 1991 , 
approximately Rsll.8 billion, or 44.4 percent of the budget, was 
expected to be derived from foreign loans or grants. 



110 




Ill 



Nepal and Bhutan: Country Studies 

Other Development Programs 

The government launched the Structural Adjustment Program 
and the Basic Needs Program in 1985. These programs stressed 
self-reliance, financial discipline, and austerity as goals through 
the year 2000. The Structural Adjustment Program sought to con- 
front some of the longer-term constraints to economic growth. Its 
measures included increasing domestic resource mobilization, 
reducing the growth of expenditures and domestic bank borrow- 
ings, and strengthening the commercial banking and public enter- 
prise sectors. 

The Structural Adjustment Program initiative focused on sus- 
tainable growth through balance in different sectors of the econo- 
my. Rural development in particular was targeted in order to raise 
the standard of living and increase agricultural production. Funds 
for education and health services, electricity and power, irrigation, 
and transportation and communications were provided. Govern- 
ment subsidies were supposed to be removed, new and improved 
standards of government efficiency were issued, and privatization 
of government enterprises was increased. Further, domestic 
resources were more fully used, and domestic bank borrowings and 
the growth of expenditures were decreased. The initial response 
to the Structural Adjustment Program was good, as gross domes- 
tic product (GDP — see Glossary), exports, and agriculture showed 
growth. 

The objective of the Basic Needs Program was also to improve 
the standard of living by increasing food production, as well as to 
provide clothing, health services, and education. Six goals were 
to be achieved by the year 2000. Daily food consumption was to 
be raised to 2,250 calories per capita. Each person was to have the 
equivalent of eleven meters of clothing and a pair of shoes per year. 
Housing requirements were estimated at thirty square meters per 
urban household and at forty to sixty square meters per rural house- 
hold. Essential utilities and sanitation were to be furnished by the 
government. Universal primary education for all children between 
five and ten years of age also was to be provided. The government 
was responsible for supplying teachers, classrooms, and educational 
materials, although villagers pitched in with labor and supplies to 
build schoolhouses (see Education, ch. 2). The population growth 
rate was targeted at 1.9 percent by 2000 (down from 2.6 percent 
in the 1980s), and life expectancy was to increase to 65 years of 
age by 2000 (up from almost 51 years in the late 1980s). The in- 
fant mortality rate was to be reduced to 45 deaths per 1,000 by 
the year 2000; World Bank (see Glossary) figures placed infant 



112 



Nepal: The Economy 



mortality at 171 per 1,000 in 1965 and at 126 per 1,000 in 1988. 
Universal primary health services also were to be ensured, primarily 
by the government, improved social services provided to han- 
dicapped people, law and order maintained, and an environment 
conducive to development established (see Population, ch. 2). 

Budgeting Process 

Prior to 1951, there was no budgeting process. Since the politi- 
cal changes in 1951 , the government has presented a budget every 
fiscal year (FY — see Glossary). Until 1959 the budget was pub- 
lished in the Nepal Raj Patra, the government gazette. Since 1959 
the budget has first been presented to a legislative body whenever 
one existed and then published. 

Regular and Development Budget 

After the First Five- Year Plan was introduced in 1955-56, the 
budget was divided into two parts — regular and development (see 
table 11, Appendix). In a speech delivered on July 13, 1990, the 
minister of finance presented a budget with four major objectives: 
to direct the development programs by eliminating the existing 
anomalies and by making them more realistic and productive, as 
well as overseeing their consistency in directly benefiting the 
deprived community; to rationalize the role of the private sector 
and the facilities provided by the government; to minimize the in- 
creasing hardship faced by the common people; and to start a 
process of repaying the accumulated financial liabilities of the 
government. Because the planned expenditures for development 
were rarely met, the 1990 budget lowered development expendi- 
tures to make the plan more realistic. 

The 1990 budget allowed for total expenditures of Rsl9.8 bil- 
lion. Revenue was estimated to be just over RslO.l billion. The 
deficit was to be met through foreign grants (Rs2.5 billion), for- 
eign loans (Rs5.5 billion), and domestic borrowing. The budget 
was not unique in terms of the size of the deficit or its dependence 
on foreign grants and loans, as this pattern had existed for more 
than three decades. 

Taxation 

Until the late 1950s, the two major sources of revenues were a 
land tax and a tariff on foreign trade. After 1959, however, in- 
come, sales, and property taxes, as well as several other minor taxes, 
were introduced. An import-export tax and various business tax- 
es, such as a sales tax, were the dominant sources of revenue. A 
land tax, which accounted for a considerable portion of revenue 



113 



Nepal and Bhutan: Country Studies 

prior to 1960, no longer provided an important source of revenue. 
Income tax on individual incomes accounted for less than 7 per- 
cent of revenues. Most of the other taxes were progressive in na- 
ture. In the late 1980s, the total tax burden was about 10 percent 
of gross national product (GNP — see Glossary) — lower than in the 
neighboring countries of India, Pakistan, and Sri Lanka, which 
taxed at rates of 11 to 13 percent. 

Money and Banking 

Nepal's first commercial bank, the Nepal Bank Limited, was 
established in 1937. The government owned 51 percent of the shares 
in the bank and controlled its operations to a large extent. Nepal 
Bank Limited was headquartered in Kathmandu and had branches 
in other parts of the country. 

There were other government banking institutions. Rastriya 
Banijya Bank (National Commercial Bank), a state-owned com- 
mercial bank, was established in 1966. The Land Reform Savings 
Corporation was established in 1966 to deal with finances related 
to land reforms. 

Nepal had two other specialized financial institutions. Nepal In- 
dustrial Development Corporation, a state-owned development 
finance organization headquartered in Kathmandu, was established 
in 1959 with United States assistance to offer financial and techni- 
cal assistance to private industry. Although the government invested 
in the corporation, representatives from the private business sec- 
tor also sat on the board of directors. The Co-operative Bank, which 
became the Agricultural Development Bank in 1967, was the main 
source of financing for small agribusinesses and cooperatives. 
Almost 75 percent of the bank was state-owned; 21 percent was 
owned by the Nepal Rastra Bank, and 5 percent by cooperatives 
and private individuals. The Agricultural Development Bank also 
served as the government's implementing agency for small farm- 
ers' group development projects assisted by the Asian Development 
Bank (see Glossary) and financed by the United Nations Develop- 
ment Programme. The Ministry of Finance reported in 1990 that 
the Agricultural Development Bank, which is vested with the leading 
role in agricultural loan investment, had granted loans to only 9 
percent of the total number of farming families since 1965. 

Since the 1960s, both commercial and specialized banks have 
expanded. As a result, more businesses and households had better 
access to the credit market although the credit market had not ex- 
panded. 

In the mid-1980s, three foreign commercial banks opened 
branches in Nepal. The Nepal Arab Bank was co-owned by the 



114 



Nepal: The Economy 



Emirates Bank International Limited (Dubai), the Nepalese govern- 
ment, and the Nepalese public. The Nepal Indosuez Bank was joint- 
ly owned by the Banque Indosuez (a French institution), Rastriya 
Banijya Bank, Rastriya Beema Sansthan (National Insurance Cor- 
poration), and the Nepalese public. Nepal Grindlays Bank was 
co-owned by a British firm called Grindlays Bank, local financial 
interests, and the Nepalese public. 

Nepal Rastra Bank was created in 1956 as the central bank. Its 
function was to supervise commercial banks and to guide the ba- 
sic monetary policy of the nation. Its major aims were to regulate 
the issue of paper money; secure countrywide circulation of Nepa- 
lese currency and achieve stability in its exchange rates; mobilize 
capital for economic development and for trade and industry 
growth; develop the banking system in the country, thereby en- 
suring the existence of banking facilities; and maintain the eco- 
nomic interests of the general public. Nepal Rastra Bank also was 
to oversee foreign exchange rates and foreign exchange reserves. 

Prior to the establishment of Nepal Rastra Bank, Kathmandu 
had little control over its foreign currency holdings. Indian rupees 
were the prevalent medium of exchange in most parts of the coun- 
try. Nepalese currency was used mostly in the Kathmandu Valley 
and the surrounding hill areas. The existence of a dual currency 
system made it hard for the government to know the status of In- 
dian currency holdings in Nepal. The exchange rates between In- 
dian and Nepalese rupees were determined in the marketplace. 
Between 1932 and 1955, the value of 100 Indian rupees varied be- 
tween Rs71 and Rsl77. The government entered the currency mar- 
ket with a form of fixed exchange rate between the two currencies 
in 1958. An act passed in 1960 sought to regulate foreign exchange 
transactions. Beginning in the 1960s, the government made spe- 
cial efforts to use Nepalese currency inside the country as a medi- 
um of exchange. 

It was only after the signing of the 1960 Trade and Transit Treaty 
with India that Nepal had full access to foreign currencies other 
than the Indian rupee. Prior to the treaty, all foreign exchange earn- 
ings went to the Central Bank of India, and all foreign currency 
needs were provided by the Indian government. After 1960 Nepal 
had full access to all foreign currency transactions and directly con- 
trolled its exports and imports with countries other than India. 

As a result of the treaty, the government had to separate Indian 
currency (convertible currency because of free convertibility) from 
other currencies (nonconvertible currency because it was directly 
controlled by Nepal Rastra Bank). In 1991 government statistics 
still separated trade with India from trade with other countries. 



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Nepal and Bhutan: Country Studies 

Tables showing international reserves listed convertible and non- 
convertible foreign exchange reserves separately. 

Foreign Trade 

Nepal's traditional trade was with India (see table 12, Appen- 
dix). In the 1950s, over 90 percent of its foreign trade was con- 
ducted with India. Most of Nepal's basic consumer goods were 
imported from India, and most of its agricultural exports went to 
India. India also supplied Nepal's industries with coal, cement, 
machines, trucks, and spare parts. 

Because goods moved by land for at least a few hundred kilo- 
meters through India, a good relationship with India was essential 
for the smooth transport of goods to and from foreign countries 
(see Relations with India; ch. 4; India, ch. 5). The March 1989 
impasse in negotiations for trade and transit treaties with India 
hence seriously damaged Nepal's economy (see table 13, Appen- 
dix). The transit treaty had allowed goods from third countries en- 
tering at Calcutta to pass through to Nepal and exempted them 
from customs and transit duties. The treaty allowed trade to tran- 
sit at twenty-one border points, and primary commodities were 
essentially duty-free in both directions. Imports from India had 
no quantitative restrictions and low tariffs. 

As a result of the breakdown in negotiations, only two trade and 
transit points remained open — both in eastern Nepal. Nepal's ex- 
ports to India were subjected to high tariffs, and imports from In- 
dia also carried increased costs. The dispute was not solved until 
June 1990, when Kathmandu and New Delhi agreed to restore eco- 
nomic relations to the status quo ante of April 1, 1987. 

Although India remained an important trade partner in 1991, 
foreign trade with India has been on the decline vis-a-vis other coun- 
tries since 1960. Trade with India decreased from more than 70 
percent in 1975 to about 27 percent of total trade in 1989. However, 
the trade deficit with India in this period increased at an annual 
rate of about 11 percent. 

To increase exports, Kathmandu introduced some fiscal and 
monetary measures, including the Export Entidement Program and 
the Dual Foreign Exchange rate, along with cash grants, income 
tax rebates, and low tariffs. Until the trade and transit dispute of 
1989, exports had increased by 11 percent or more per year since 
1975. Nepal's major exports were clothing, carpets, grain, and 
leather goods. In 1989-90 the carpet industry was responsible for 
producing 54 percent of Nepal's exports. In FY 1988, India received 
38 percent of Nepal's exports, the United States 23 percent, Britain 



116 



Newari architecture in Durbar Square, Patau 
Bustling Bhotahiti Square, Kathmandu 
Courtesy Harvey Follender 



117 



Nepal and Bhutan: Country Studies 

6 percent, and other European countries 9 percent (see table 14; 
table 15, Appendix). 

Imports increased at a faster rate than exports. Since the 1970s, 
the foreign trade deficit had increased in most years. Nepal's 
primary imports were petroleum products, fertilizer, and machin- 
ery; the other chief imports were boots and shoes, cement, 
cigarettes, iron and steel, medicines, salt, sugar, tea, and textiles. 
India supplied 36 percent of imports, Japan 13 percent, European 
countries 4 percent, and the United States 1 percent in FY 1988. 
Receipts from service and transfer payments were insufficient to 
finance trade deficits. This imbalance has resulted in an increase 
in the current account deficit (see table 16; table 17, Appendix). 

In March 1989, the government introduced the Open General 
License as a step to support the Structural Adjustment Program. 
It included inputs for existing industries — raw wool, cotton yarn, 
and cotton fabrics. The program also allowed supports for petroleum 
products, coal, tractors, buses, and trucks, as well as for some house- 
hold items, such as ovens and toasters. In May 1990, however, 
Kathmandu deleted all goods except raw wool, cotton yarn, petrole- 
um products, coal, and newsprint from Open General License 
imports. 

The government also introduced an auction system for the im- 
port of goods. The goods were classified in three categories: in- 
dustrial raw materials, semiluxury items, and luxury items. 
Premiums were assigned and foreign exchange quotas allocated for 
each category. The premium for raw materials was lower than that 
for luxury items. 

Balance of Payments 

The balance of payments in the 1980s improved, despite a con- 
tinued trade deficit. This improvement was achieved through for- 
eign loans and assistance. Nonetheless, foreign debt was increasing. 
Because foreign debt and the balance of payments were intrinsi- 
cally linked, an improvement in one area was at the expense of 
the other. Between 1986 and 1990, the debt service ratio increased 
from an average of under 7 percent to about 12 percent. In 1989 
the debt service ratio skyrocketed to 17 percent. This increase was 
the result of the acquisition of two commercial aircraft and a decline 
in exports caused by trade and transit difficulties. According to 
World Bank figures, by mid- 1989 official foreign debt outstanding 
and disbursed was approximately US$1 .3 billion. There also was a 
deficit in the balance of payments of convertible Indian currency. 

The Structural Adjustment Program addressed the trade de- 
ficit and sought to increase the speed of economic development. 



118 



Nepal: The Economy 



Although exports increased in FY 1988 by 34 percent over the previ- 
ous year, Nepal still imported much more than it exported. In FY 
1988, exports were US$187 million (up from US$139 million the 
previous year), but imports were US$630 million, up from US$507 
the previous year. Nonetheless, more efficient use of foreign aid, 
increased earnings from exports, tourism, and other services im- 
proved the balance of payments situation and increased the inter- 
national reserves through FY 1989. Foreign exchange reserves also 
had increased, mostly because of loans from the World Bank and 
the International Monetary Fund (IMF — see Glossary) for the 
Structural Adjustment Program, as well as loans from the Asian 
Development Bank. Both Kuwait and Saudi Arabia had made loans 
that alleviated the balance of trade deficit. The trade and transit 
problems with India that began in March 1989, however, erased 
those gains and resulted in tremendous financial hardships. 

Foreign Aid 

Nepal has been a recipient of foreign assistance since 1952 when 
it joined the Colombo Plan for Cooperative, Economic, and So- 
cial Development in Asia and the Pacific (Colombo Plan — see Glos- 
sary). The plan was established, under a slightly different name, 
by the British Commonwealth countries in 1951 . During the 1950s, 
many Nepalese received scholarships through the Colombo Plan 
to go to various countries for studies in technical and professional 
areas. 

During the 1950s, all other aid was in the form of grants. The 
bulk of assistance was directed toward developing agriculture, trans- 
portation infrastructure, and power generation. Other areas tar- 
geted for assistance were communications, industry, education, and 
health. India and the United States each were responsible for more 
than one-third of all grants. Both countries established aid mis- 
sions to Nepal and directed aid to special projects. Other major 
donors during the 1950s were China and the Soviet Union. Brit- 
ain, Switzerland, Australia, Japan, and New Zealand also were 
involved in lesser assistance programs. The United Nations (UN) 
provided some technical assistance. 

Until the mid-1960s, Nepal depended mostly, if not totally, on 
foreign grants for all its development projects. Most of these grants 
were on a bilateral basis. Grants from India helped to build the 
airport in Kathmandu, the Kosi Dam, and various irrigation 
projects. The Soviet Union helped to build cigarette and sugar fac- 
tories, a hydroelectric plant, and part of the East- West Highway. 
Grants from China helped to construct roads; a trolley bus line 
in Kathmandu; and leather and shoe, brick, and tile factories. 



119 



Nepal and Bhutan: Country Studies 

United States grants supported village development, agriculture, 
education, and public health. The United States also helped to start 
the Nepal Industrial Development Corporation, which granted 
loans to several industries (see Money and Banking, this ch.). 

Beginning in the 1960s, some bilateral assistance was in the form 
of loans. The loan share of foreign aid increased from under 4 per- 
cent between 1965 and 1970 to more than 25 percent by the 1985-88 
period (see table 18, Appendix). 

In the 1970s, multilateral assistance programs started to play an 
important role in development planning and accounted for more 
than 70 percent of funding for development planning. By the end 
of the 1980s, the great majority of foreign aid was in the form of 
multilateral assistance programs. The major sources of borrowing 
or grants for these programs were the International Development 
Association of the World Bank and the Asian Development Bank. 
Most of these loans could be characterized as soft loans (see 
Glossary). 

Sources of foreign aid were numerous. Eleven UN agencies, 
seven multilateral lending agencies (such as the World Bank), and 
eight private agencies (for example, the Ford Foundation) had par- 
ticipated in aid programs. At least seventeen countries offered 
bilateral assistance. Under the auspices of the World Bank, the 
Nepal Aid Group was created in 1976. By 1987 sixteen countries 
and six international agencies participated in the group. The level 
of commitment from the Nepal Aid Group had increased from 
Rsl.5 billion in 1976-77 to Rs5.6 billion in 1987-88. The bulk 
of foreign aid contributions after 1976 came from this group. 

Most economic development projects were funded with exter- 
nal assistance on concessional terms. In the mid- to late 1980s, 
recorded aid disbursements averaged more than US$200 million 
annually — about 7 percent of GDP. More than 70 percent of the 
aid was in the form of grants; the remainder was in the form of 
concessional loans. A high percentage of technical assistance and 
direct aid payments was not documented. Much of the aid grant- 
ed was underused (see table 19, Appendix). 

As of 1991, Nepal was receiving external assistance in the form 
of project aid, commodity aid, technical assistance, and program 
aid. Project aid funded irrigation programs, hydroelectric plants, 
and roads. Commodity assistance targets included fertilizers, im- 
proved seeds, and construction materials provided by donor aid 
agencies. Technical assistance covered services of experts to ad- 
vise the government in training indigenous personnel to perform 
research in technological fields and resulted in the development 



120 



Nepal: The Economy 



of skilled labor. Program aid supported various projects, in par- 
ticular the agricultural and health fields. 

Dependence on foreign aid was increasing. Between 1984 and 
1987, foreign aid as a percentage of GNP increased from under 
8 percent to almost 13 percent. Debt service as a percentage of GDP 
increased from less than 0.1 percent in 1974-75 to almost 1 per- 
cent in 1987-88. Outstanding debt in this period increased from 
Rs346 million to almost Rs21 billion. 

From FY 1970 through FY 1988, United States commitments, 
including United States Export-Import Bank (Eximbank — see Glos- 
sary) funds, totaled US$285 million. In the 1980s, bilateral United 
States economic assistance channelled through the Agency for In- 
ternational Development averaged US$15 million annually. The 
United States also contributed to various international institutions 
and private voluntary organizations that serviced Nepal for a total 
contribution to multilateral aid in excess of US$250 million in the 
1980s. Other Western countries and official development assistance 
(ODA — see Glossary) and bilateral commitments for the 1980-87 
period totaled US$1 .8 billion. The Organization of the Petroleum 
Exporting Countries (OPEC) provided US$30 million in bilateral 
aid from 1979 to 1989. Communist countries provided US$273 
million in aid from 1970 to 1988. From 1981 until 1988, Japan was 
the premier source of bilateral ODA for Nepal, accounting for more 
than one-third of all funds. The second biggest donor during that 
period was the Federal Republic of Germany (West Germany). 

Labor 

Workers' rights and organized labor were in transition in 
mid-1991. During the late 1940s and early 1950s, some labor dis- 
putes led to strikes and lockouts, and labor unions sprang up in 
various factories. In 1957 the government announced the Indus- 
trial Policy of Nepal, under which it undertook the responsibility 
of promoting, assisting, and regulating industries. 

The Factories and Factory Workers' Act of 1959 established rules 
and regulations to govern labor-management relationships and 
working conditions in factories. The 1977 amended version of the 
act provided for a six-day, forty-eight-hour work week, thirty days 
annually for holidays and fifteen days annually for sick leave, and 
some health and safety standards and benefits. Implementation of 
the act, a responsibility of the Ministry of Labor and Social Ser- 
vices, was not always forthcoming, however, and was only some- 
what affected by the success of the prodemocracy movement. 

A revision of the body of labor laws was pending in mid- 1991; 
it was to include a code that defined and regulated workers' rights. 



121 



Nepal and Bhutan: Country Studies 

Labor unions, restricted prior to the July 1991 repeal of the Or- 
ganization and Control Act of 1963, still were limited. Estimates 
suggested that only approximately 3 percent of the economically 
active population, or 30 percent of nonagricultural workers, were 
union members. 

Because of limited industrialization, unemployment and partic- 
ularly underemployment were quite high. In 1977 the National 
Planning Commission undertook a survey, which determined un- 
employment to be 5.6 percent in rural areas and almost 6 percent 
in urban areas. Underemployment was estimated to be about 63 
percent in rural areas and about 45 percent in urban areas. In 1981 
the Asian Regional Team for Employment Production estimated 
the unemployment and underemployment rates to range from 2 1 
to 28 percent in the Tarai Region and from 37 to 47 percent in 
the Hill Region. The availability of nonagricultural employment 
opportunities in the labor force was reported at approximately 
600,000 positions in 1981. Underemployment for all of Nepal was 
reported to range from 25 to 40 percent in 1987; unemployment 
nationally stood at 5 percent. 

Agriculture 

Agriculture dominated the economy. In the late 1980s, it was 
the livelihood for more than 90 percent of the population, although 
only approximately 20 percent of the total land area was cultiva- 
ble. Agriculture accounted for, on average, about 60 percent of 
the GDP and approximately 75 percent of exports. Since the for- 
mulation of the Fifth Five-Year Plan (1975-80), agriculture has 
been the highest priority because economic growth was dependent 
on both increasing the productivity of existing crops and diversifying 
the agricultural base for use as industrial inputs. 

In trying to increase agricultural production and diversify the 
agricultural base, the government focused on irrigation, the use 
of fertilizers and insecticides, the introduction of new implements 
and new seeds of high-yield varieties, and the provision of credit. 
The lack of distribution of these inputs, as well as problems in 
obtaining supplies, however, inhibited progress. Although land 
reclamation and settlement were occurring in the Tarai Region, 
environmental degradation — ecological imbalance resulting from 
deforestation — also prevented progress (see The Land, ch. 2). 

Although new agricultural technologies helped increase food 
production, there still was room for further growth. Past experience 
indicated bottlenecks, however, in using modern technology to 
achieve a healthy growth. The conflicting goals of producing cash 
crops both for food and for industrial inputs also were problematic. 



122 



Oxen in fields, Tulsipur area, Rapti Zone in the Tarai Region 

Courtesy John N. Gunning 

The production of crops fluctuated widely as a result of these 
factors as well as weather conditions. Although agricultural produc- 
tion grew at an average annual rate of 2.4 percent from 1974 to 
1989, it did not keep pace with population growth, which increased 
at an average annual rate of 2.6 percent over the same period. Fur- 
ther, the annual average growth rate of food grain production was 
only 1.2 percent during the same period. 

There were some successes. Fertile lands in the Tarai Region 
and hardworking peasants in the Hill Region provided greater sup- 
plies of food staples (mostly rice and corn), increasing the daily 
caloric intake of the population locally to over 2,000 calories per 
capita in 1988 from about 1,900 per capita in 1965. Moreover, 
areas with access to irrigation facilities increased from approximately 
6,200 hectares in 1956 to nearly 583,000 hectares by 1990 (see ta- 
ble 20, Appendix). 

Rice was the most important cereal crop. In 1966 total rice 
production amounted to a little more than 1 million tons; by 1989 
more than 3 million tons were produced. Fluctuation in rice produc- 
tion was very common because of changes in rainfall; overall, 
however, rice production had increased following the introduction 
of new cultivation techniques as well as increases in cultivated land. 
By 1988 approximately 3.9 million hectares of land were under 



123 



Nepal and Bhutan: Country Studies 

paddy cultivation. In 1966 approximately 500,000 tons of corn, 
the second major food crop, were produced. By 1989 corn produc- 
tion had increased to over 1 million tons. 

Other food crops included wheat, millet, and barley, but their 
contribution to the agricultural sector was small (see table 21 , Ap- 
pendix). Increased production of cash crops — used as input to new 
industries — dominated in the early 1970s. Sugarcane and tobacco 
also showed considerable increases in production from the 1970s 
to the 1980s. Potatoes and oilseed production had shown moderate 
growth since 1980. Medicinal herbs were grown in the north on 
the slopes of the Himalayas, but increases in production were limited 
by continued environmental degradation. According to government 
statistics, production of milk, meat, and fruit had improved but 
as of the late 1980s still had not reached a point where nutritionally 
balanced food was available to most people. Additionally, as of 1989 
the increases in meat and milk production had not met the desired 
level of output. 

Food grains contributed 76 percent of total crop production in 
1988-89. In 1989-90 despite poor weather conditions and a lack 
of agricultural inputs — particularly fertilizer — production increased 
by 5 percent. In fact, severe weather fluctuations often affected 
production levels. Some of the gains in production through the 1980s 
were due to increased productivity of the work force (about 7 per- 
cent over fifteen years); other gains were due to increased land use 
and favorable weather conditions. 

Land Reform 

Nepal long had been under a feudal system where a small num- 
ber of landlords held most of the agricultural land (see Infighting 
among Aristocratic Factions, ch. 1). The state extended its con- 
trol over the land by the administrative device of making land grants 
and assignments and raising revenues. Most of the landlords who 
were granted state lands were not directly involved in farming but 
contracted with tenant farmers on a customary, and hereditary, 
basis. The basic purpose of land reform was to protect the tenant 
farmers, take away excess holdings from landlords, and distribute 
property to farmers with small landholdings (holding one to three 
hectares) and landless agrarian households. 

Efforts at land reform began with the enactment of the Land 
and Cultivation Record Complilation Act in 1956 and continued 
with the Lands Act in 1957 when the government began to com- 
pile tenants' records. Although these acts facilitated land reform, 



124 



Nepal: The Economy 



the lot of the small farmer did not improve, and further efforts were 
made. The Agricultural Reorganization Act, passed in 1963, and 
the Land Reform Act, passed in 1964, emphasized security for 
tenant farmers and put a ceiling on landholdings. There were several 
loopholes in the acts, however, and large landholders continued 
to control most of the lands. There was some success in protecting 
the rights of tenant farmers, but not much was achieved in land 
redistribution. As of 1990, average landholdings remained small 
(see table 8, Appendix). 

Forests 

From 1950 to 1980, Nepal lost half of its forest cover. The first 
scientific measurement of forest resources was done in a 1964 sur- 
vey, which estimated about 6.5 million hectares of forest area. Later 
studies indicated that as of 1987 the forest area in the hills had re- 
mained the same but that elsewhere forests had been degraded. 
By 1988 forests covered only approximately 30 percent of the land 
area. Deforestation was typical of much of the country and was 
linked to increased demands for grazing land, farmland, and fod- 
der as the animal and human populations grew. Further, most of 
the population's energy needs were met by firewood. All these fac- 
tors exacerbated deforestation. 

Fuelwood needs of the population mainly resulted from the lack 
of alternative sources of energy. This fact was particularly evident 
during the 1989 trade and transit impasse with India because the 
dispute resulted in a shortage of domestic cooking fuel. As a result 
of the decreased availability of kerosene during this period, the de- 
mand for fuelwood rose sharply in the Kathmandu Valley, and 
fuelwood consumption increased by an estimated 415 percent. 

Deforestation caused erosion and complicated cultivation, affect- 
ing the future productivity of agricultural lands. Although several 
laws to counter degradation had been enacted, the results were 
modest, and government plans for afforestation had not met their 
targets. The government also established the Timber Corporation 
of Nepal, the Fuelwood Corporation, and the Forest Products De- 
velopment Board to harvest the forests in such a way that their 
degradation would be retarded. In 1988-89 the Fuelwood Corpo- 
ration merged with the Timber Corporation of Nepal, but forest 
management through these and other government agencies had 
made very little progress. In FY 1989, more than 28,000 hectares 
were targeted for afforestation, but only approximately 23,000 hect- 
ares were afforested that year. 



125 



Nepal and Bhutan: Country Studies 



GDP 1989 = US $2.9 billion 



NET INDIRECT 
TAXES 
5.7% 




Source: Based on information from World Bank, Trends in Developing Economies, 1990, 
Washington, 1990, 386. 

Figure 8. Nepal: Shares of Gross Domestic Product, 1989 

A twenty-one-year forestry master plan was devised in FY 1989 
to stem deforestation. Implemented with the help of the Asian De- 
velopment Bank, the program targeted reforestation and educa- 
tion. It sought to maintain the forestation level at 37 percent of 
land area. 

Industry 

During the 1950s and 1960s, Kathmandu received aid commit- 
ments from Moscow and Beijing. During the 1960s, Soviet and 
Chinese aid also supported development of a few government- 
owned industries. Most of the industries established used agricul- 
tural products such as jute, sugar, and tea as raw materials. Other 
industries were dependent on various inputs imported from other 
countries, mainly India. 

As a result of the 1989-90 trade dispute with India, many in- 
puts were unavailable, causing lower capacity utilization in some 
industries. During the same period, Nepal also lost India as its tradi- 
tional market for certain goods. The lack of industrial materials 



126 



Nepal: The Economy 



such as coal, furnace oil, machinery, and spare parts adversely af- 
fected industrial production. 

Industry accounted for less than 20 percent of total GDP in the 
1980s (see fig. 8). Relatively small by international standards, most 
of the industries established in the 1950s and 1960s were developed 
with government protection. Traditional cottage industries, includ- 
ing basket-weaving as well as cotton fabric and edible oil produc- 
tion, comprised approximately 60 percent of industrial output; there 
also were attempts to develop cottage industries to produce furni- 
ture, soap, and textiles. The remainder of industrial output came 
from modern industries, such as jute mills, cigarette factories, and 
cement plants. 

Manufacturing 

Among the modern industries were large manufacturing plants, 
including many public sector operations. The major manufactur- 
ing industries produced jute, sugar, cigarettes, beer, matches, shoes, 
chemicals, cement, and bricks. The garment and carpet industries, 
targeted at export production, have grown rapidly since the 
mid-1980s whereas jute production has declined. Industrial estates 
were located in Patan (also called Lalitpur), Balaju, Hetauda, Pok- 
hara, Dharan, Butawal, and Nepalganj. The government provid- 
ed the land and buildings for the industrial estates, but the industries 
themselves were mostly privately owned. 

The 1986-87 Nepal Standard Industrial Classification counted 
2,054 manufacturing establishments of 10 or more persons from 
51 major industry groups, employing about 125,000 workers. That 
same year the total output from these industries amounted to about 
RslO billion; value added was estimated at almost Rs3.6 billion. 
It was nearly Rs5.1 billion in FY 1989. By FY 1989, 2,334 such 
establishments were recorded, employing about 141,000 persons. 

Private Industry 

The history of incorporated private firms in Nepal is short. The 
Nepal Companies Act of 1936 provided for the incorporation of 
industrial enterprises on joint stock principle with limited liabili- 
ty. The first such firm, Biratnagar Jute Mills, was a collaborative 
venture of Indian and Nepalese entrepreneurs. It was formed in 
1936 with initial capital of 160,000 Indian rupees. 

In response to shortages of some consumer goods during World 
War II (1939-45), fourteen private companies emerged in such 
diverse fields as mining, electrical generation, and paper and soap 
production. The initial capital invested in each of these industries 
was small. In 1942 two paper mills emerged as joint ventures of 



127 



Nepal and Bhutan: Country Studies 

Nepalese and Indian entrepreneurs. Industrial growth gained 
momentum after 1945, although the end of World War II had 
reduced the scarcity of goods and caused many of these compa- 
nies to incur losses. 

Under the Nepal Companies Act, there was no provision for pri- 
vate limited companies. In 1951, however, a new act was im- 
plemented that had such a provision. This act encouraged the 
establishment of ninety-two new private joint stock companies be- 
tween 1952 and 1964. Most of these companies were much smaller 
than existing companies. Under the provisions of the 1951 act, pub- 
lic disclosure of the activities of the firms was not required, whereas 
the 1936 act allowed substantial government intervention. The In- 
dustrial Enterprises Act of 1974 and its frequent amendments shifted 
the government's emphasis on growth from the public to the pri- 
vate sector. However, discrepancies between policy and practice 
were evident, and the public sector continued to be favored. 

Public Companies 

Public companies also had varied success. Between 1936 and 
1939, twenty public companies were formed, of which three failed. 
Between 1945 and 1951, thirty-five public firms were incorporat- 
ed, six of which went out of business. Between 1936 and 1963, 
fifty-four firms were incorporated, but at the end of 1963 only thirty- 
four remained in operation. The success of public companies con- 
tinued to be erratic. 

Minerals 

Because only a few minerals were available in small quantities 
for commercial utilization, the mineral industry's contribution to 
the economy was small. Most mineral commodities were used for 
domestic construction. The principal mineral agency was the 
Department of Mines and Geology. Geological surveys conducted 
in the past had indicated the possibility of major metallic and in- 
dustrial mineral deposits, but a poor infrastructure and lack of a 
skilled work force inhibited further development of the mineral in- 
dustry. 

The most important mineral resources exploited were limestone 
for cement, clay, garnet, magnetite, and talc. Crude magnetite 
production declined from a high of approximately 63,200 tons in 
1986 to approximately 28,000 tons in 1989; it was projected to 
decline further to 25,000 tons in 1990. 

In 1990 mineral production decreased significantly, largely be- 
cause of political unrest. Production of cement fell approximately 
51 percent over 1989 — from approximately 218,000 tons to about 



128 



Nepal: The Economy 



107,200 tons. Production of clays for cement manufacture dropped 
from 7,206 tons to 824 tons. Lignite production decreased 19 per- 
cent, and talc production fell 73 percent. Ornamental marble 
production, however, increased in 1989 — by 100 percent in cut mar- 
ble and 1,560 percent in marble chips. 

Nonetheless, the mining industry had the potential to become 
a more important part of the economy, as new mines were being 
planned or were being developed. Two cement plants already were 
in operation, and a third one was being planned. It was expected 
that with full production in the three plants, Nepal might become 
self-sufficient in cement. A magnetite mine and pressuring plant 
east of Kathmandu had completed its construction phase and be- 
gan production of chalk powder (talcum powder) on a trial basis 
in 1990. A high-grade lead and zinc mine was being developed north 
of Kathmandu in the region of Ganesh Himal and was expected 
to become operational in the 1990s, although raising enough capi- 
tal for the project was problematic. Production of agricultural lime 
in 1989 doubled that of the previous year, suggesting that progress 
was being made towards meeting requirements of the agricultural 
sector. 

Energy 

According to government reports for 1988-89, approximately 
95 percent of energy used was from traditional sources: fuelwood 
(76 percent), agricultural products (11 percent), and animal waste 
(8 percent). The remaining resources consisted of petroleum prod- 
ucts (over 3 percent), coal (over 1 percent), and electricity (under 
1 percent). Alternative sources, including steam, solar, and wind 
power, also were used on a very small scale. 

Despite the great potential for hydroelectric power, most of the 
energy used by the Nepalese came from its forests (see Forests, this 
ch.). The terrain, lack of a transportation network, and the need 
for large amounts of capital investment for hydroelectric plants and 
electric facilities hindered the development of these sources of en- 
ergy. The uneven distribution of resources, however, indicated the 
importance of moving away from excessive dependence on fuel- 
wood as a source of energy. Nepal's forests were rapidly being 
degraded. 

In the early 1980s, more than half the electric energy generated 
was used by households, and only one-third was used by the in- 
dustrial sector. The share of electricity use by the household sec- 
tor was declining in the late 1980s. In 1985 about 6 percent of the 
population had access to electricity, and by 1991 electricity was 
accessible to more than 8 percent of the population. There were 



129 




130 




Various modes of transportation on New Road, Kathmandu 

Courtesy Harvey Follender 



131 



Nepal and Bhutan: Country Studies 

no regional power grids, and electricity was available regularly only 
in the capital and a few of the larger population centers. Approxi- 
mately 15 percent of the electricity was generated by diesel plants. 

Some estimates indicated Nepal's hydroelectric power potential 
at 80 million kilowatts — 2.6 percent of the world's capacity. Only 
a tiny fraction of this potential energy had been utilized until 1960, 
and by 1964 less than 3,000 kilowatts of electricity was generated 
by hydropower. By 1989, however, in excess of 230,000 kilowatts 
of electricity — more than 80 percent of the country's installed electric 
power — was generated by hydroelectric power. Although there were 
difficulties, the output of electricity had grown. For example, a 
60-megawatt hydroelectric project known as Kulekhani I, funded 
by the World Bank, Kuwait, and Japan, became operational in 
1982. Kulekhani II, an additional 32-megawatt project, was com- 
pleted in 1987. Kulekhani III, in the planning stages in 1990, 
projected an additional 17-megawatt capacity. It was estimated that 
by late 1990, generating capacity would be at least 237 megawatts. 

Feasibility studies and engineering designs were planned for 
several hydroelectric projects and rural electric facilities. Nepal and 
India had joint irrigation-hydroelectric projects on the Narayani 
(India's Gandak River), Kosi, and Trisuli rivers. A feasibility study 
was being conducted for a dam project to harness the hydropower 
potential of the Karnali River. Inasmuch as Nepal could not use 
as much energy as it could produce, the potential for selling excess 
energy to neighboring countries (especially India) existed. The ex- 
pansion of electric power, however, had to be accompanied by the 
construction of transmission lines across the country, a project re- 
quiring considerable capital. 

The Asian Development Bank committed funds to establish a 
national electricity grid with hydroelectric power plants on the Arun 
and Marsyandi rivers. The Marsyandi site, a US$325 million 
project with a 69-megawatt capacity, was commissioned in 1990 
with major financing provided by Germany, Japan, Kuwait, Saudi 
Arabia, the Asian Development Bank, and the World Bank. A 
404-megawatt Arun III Project was planned, but construction was 
not scheduled to begin until 1992, and completion was not expect- 
ed until 1997. 

The government also encouraged establishing biogas plants with 
help from the Agriculture Development Bank. More than 1,000 
plants were erected in 1988 and 1989. Although these plants were 
small, they were capable of slowing deforestation — at least for the 
short term. 

To meet energy needs, petroleum products were imported. In 
the late 1980s, more than 40 percent of Nepal's foreign exchange 



132 



Nepal: The Economy 



earnings were spent on petroleum imports — particularly during the 
trade and transit dispute with India. In 1988-89, the government 
contracted with two foreign companies to do exploratory drilling 
for oil and gas. A joint venture of Royal Dutch Shell and Triton 
Energy received a concession to explore for petroleum in south- 
eastern Nepal, but the companies relinquished their contract in 
May 1990 upon drilling dry wells. Nonetheless, further analysis 
of the area was being carried on, and other exploration blocks were 
being evaluated and traded among various companies. 

Transportation 

The inadequacy of the transportation system assured its high 
priority in all development plans. Nonetheless, budget allocations 
for transport and communications declined by more than half from 
the Fifth Five-Year Plan (1975-80) to the Seventh Five- Year Plan 
(1985-90). Before 1960 the bulk of goods transported used human 
labor and animals. Although the infrastructure remained under- 
developed, since 1960 the building of paved roads has helped make 
the transportation of both goods and people more accessible (see 
fig. 9). By the early 1990s, the major modes of transportation were 
by road or by air; however, trails still were used to transport goods. 

The 1989 trade and transit dispute with India in also affected 
the transportation system. There were acute shortages of coal and 
petroleum products as well as spare parts supplied by India. These 
shortages hampered the domestic transport system; the shortages 
in turn affected service industries and tourism. 

Roads 

Nepal's first paved road was built with aid from India in the 
early 1950s. It connected Kathmandu with Raxaul on the Indian 
border. As of 1991, additional roads were being built, primarily 
with the cooperation of India but also the United States, includ- 
ing an East-West Highway through southern portions of the coun- 
try. Other roads, in various stages of planning, construction, or 
already completed, were built with assistance from Saudi Arabia, 
India, Britain, the Soviet Union, Switzerland, China, the United 
States, the World Bank, and the Asian Development Bank. 

Prior to the First Five-Year Plan, Nepal had approximately 600 
kilometers of roads, including fair weather roads. Although tar- 
gets were rarely met on time, road construction has increased. By 
mid-July 1989, approximately 2,900 kilometers of paved roads, 
1,600 kilometers of gravel roads, and 2,500 kilometers of earthen 
(fair weather) roads were in existence. Most goods and passengers 



133 



Nepal and Bhutan: Country Studies 




134 



Nepal: The Economy 



utilized these roads, and transit no longer was exclusively through 
India. 

The main roads consisted of east-west and north- south highways. 
The longest highway was the Mahendra Highway, or East- West 
Highway. Its total proposed length was approximately 1,050 kilo- 
meters, of which 850 kilometers were completed as of 1989. The 
1 14-kilometer Arniko Highway, which connected Kathmandu with 
Kodari on the Chinese border, was constructed with Chinese as- 
sistance. The Siddhartha Highway was constructed with India's 
help and connected the Pokhara Valley with Sonauli in India's Uttar 
Pradesh state. Some of the other completed highways (rajmarg) run- 
ning east-west were the Tribhuvan-Rajpath, Prithvi, and Kodari 
highways. Among north-south highways, Gorkha-Narayangadh, 
Kohalpur-Surkhet, Sindhuli-Bargachi, and Dhangadhi-Dadeldhura 
roads were mosdy completed in the early 1990s. A number of north- 
south roads were being constructed to connect with the east-west 
Mahendra Highway. 

Because of the terrain, building and maintaining roads were very 
expensive. Landslides in hilly areas during monsoon season were 
very common. Nepal also had several rivers and creeks running 
from north to south whose levels during monsoon season were 
difficult to predict. All these factors caused periodic slowdowns in 
the movement of trucks and buses. Nevertheless, as a result of road 
expansion, several private firms ran passenger buses and trucks 
to transport goods. From 1980 to 1990, the number of passenger 
vehicles increased by more than 100 percent. During FY 1990, new 
vehicle registrations included 723 buses and minibuses, 240 trucks, 
and 1,831 jeeps, cars, and pickup vans. 

Railroads 

The railroad system was used by an average of 1 .5 million pas- 
sengers annually from 1985 to 1989. Goods transported averaged 
between 15,000 and 19,000 tons annually during that same period. 

Railroad service was initiated in 1928 and generally connected 
the commercial centers of the Tarai with Indian railheads near the 
southern border. The Janakpur Railway, headquartered in Jay- 
nagar, India, was a fifty-three-kilometer narrow-gauge railroad be- 
tween Jaynagar and Janakpur and Bijalpura in Nepal. As of the 
late 1980s, its equipment consisted of ten steam locomotives, twenty- 
five passenger coaches and vans, and fifty- two freight wagons. The 
Nepal Government Railway consisted of forty-eight kilometers link- 
ing Amlekhganj to the railhead in Raxaul, India, and was equipped 
with seven steam locomotives, twelve coaches, and eighty-two wag- 
ons. The opening of a north-south highway, however, made the 



135 



Nepal and Bhutan: Country Studies 

railroad service from Raxaul to Amlekhganj somewhat obsolete. 
The Sixth Five-Year Plan provided for construction of a rail line 
between Udaipur Garhi in eastern Nepal and Calcutta. 

Ropeways 

Ropeways using cables to transport freight were constructed as 
part of an effort to provide transport facilities for the populace and 
to replace human and animal power as a means to traverse the 
difficult terrain. The first ropeway was initiated in 1922 and was 
extended twice. 

In the early 1950s, many goods were transported to Kathman- 
du using ropeways. Ropeways have become less important with 
the development and extension of roads. Nonetheless, the forty- 
two-kilometer ropeway that traverses Hetauda into the Kathman- 
du Valley still was operational in 1991 . The transport of food, con- 
struction materials, and heavy goods on that ropeway could be 
accomplished at the rate of twenty-two and a half tons of freight 
per hour. During the 1985 to 1989 period, the ropeway carried 
approximately 12,000 tons of freight per year. 

Civil Aviation 

Air transportation to Kathmandu from India started around 
1950. Although the primary airport is Tribhuvan International Air- 
port outside Kathmandu, more than thirty airfields have been ad- 
ded since the 1950s. The primary domestic air routes from 
Kathmandu in 1991 were to Jumla, Bhairahwa, Biratnagar, Nepal- 
ganj, Gorkha, and Pokhara. There also were international flights 
from West European cities, such as London and Frankfurt, and 
Asian cities, including Karachi, Paro (in Bhutan), New Delhi, Hong 
Kong, and Bangkok, to Kathmandu. Several airlines, including 
Royal Nepal Airlines (owned by the government), connected Kath- 
mandu with cities in other parts of the world. These flights have 
facilitated international traffic considerably. Royal Nepal Airlines 
reported approximately 452,000 passengers in FY 1986, approxi- 
mately 569,200 passengers in FY 1988, and approximately 608,300 
passengers in FY 1990. The carrier transported almost 3,900 tons 
of freight in FY 1986, approximately 6,000 tons in FY 1988, and 
about 7,260 tons in FY 1990. The Royal Nepal Airlines fleet, which 
was to be increased by two Boeing 757 aircraft in 1991, was often 
disabled by poor maintenance and lack of spare parts and aircraft. 
In the absence of Nepalese operations, the Soviet Union's Aeroflot, 
Bhutan's Druk-Air, and Hong Kong's Dragonair began servicing 
Kathmandu during 1990. 



136 



Airplane at an unpaved 
landing strip at Lukla, 
en route to the Khumbu 
region, gateway to the 
Everest area 
Courtesy 
Janet MacDonald 



Other Modes of Transportation 

Local public transportation was not common except in the Kath- 
mandu Valley. A trolley bus serviced the eastern part of the valley 
between Kathmandu and Bhadgaon (or Bhaktapur), carrying about 
500,000 passengers annually during the late 1980s. Sajha (Co- 
operative Union) buses provided passenger service in Kathman- 
du and to other locations in the eastern and western parts of the 
country. 

There was discussion in Kathmandu of developing a water trans- 
portation system to utilize the rivers passing through Nepal. The 
combined length of rivers was about 3,500 kilometers (see The River 
System, ch. 2). The government pursued feasibility studies with 
the help of consultants, mostly foreign; however, studies conduct- 
ed as of 1991 were not encouraging. 

Communications 

Postal services have been in existence, although extremely slow 
and with limited service, since the Shah and Rana periods. With 
the advancement in transportation systems, however, postal ser- 
vice also had improved. In FY 1985, there were 1,868 post offices. 
By FY 1990, the number of post offices had increased to 2,232, 
but even the government admitted that access to postal service for 
many Nepalese still was far from satisfactory. 



137 



Nepal and Bhutan: Country Studies 

Public telephone services also became available during Rana rule, 
but service was limited. Beginning in the early 1950s, a few hundred 
telephones were installed, mostly for government offices and mili- 
tary officers' homes. As of 1989, the number of private telephones 
had increased to over 45,000, and most of the urban areas had tel- 
ephone service. In 1986 there were twenty-six telephone exchanges; 
by 1990 there were forty- two such exchanges. The number of public 
call offices during this same period increased from twenty-one to 
seventy- six. International telephone and telex services were avail- 
able, as were facsimile (fax) services. There was also a rudimen- 
tary radio relay network with fifty-eight channels nationwide in 
1989. In addition, there were fifty-five point-to-point shortwave 
stations for telephone transmission in 1990. 

Radio Nepal, transmitting by shortwave, has been in existence 
since the early 1950s. In 1991 Nepal had six AM broadcast sta- 
tions. Radio was a good source of news and entertainment for many 
Nepalese; Radio Nepal, for example, provided about 100 hours 
of programming every week. Estimates of the total number of ra- 
dio sets ranged from 600,000 to 2 million in 1989. 

In late 1985, television programming began on a small scale in 
Kathmandu. In 1991 total programming was only three hours daily, 
with an additional two hours on Saturday mornings. The single 
station, Nepal Television had a transmitter outside Kathmandu 
and transmitting stations in Pokhara, Biratnagar, and Hetauda. 
The programs of foreign television organizations, such as the Ca- 
ble News Network, also could be received by a satellite dish in 
Nepal. There were approximately 200,000 television sets in 1991, 
and in some areas the government provided television sets for com- 
munity viewing. 

Tourism 

Tourism was a major source of foreign exchange earnings. Es- 
pecially since Mount Everest (Sagarmatha in Nepali) was first 
climbed by Sir Edmund Hillary and Tensing Sherpa in 1953, the 
Himalayas have attracted foreigners to Nepal. Mountaineering and 
hiking were of considerable interest as were rafting, canoeing, and 
hang gliding. Tourism was facilitated with the opening of airways 
to Kathmandu and other parts of the country and the easing of 
travel restrictions. 

In the 1950s, there was a shortage of hotels. Beginning in the 
1960s, the government encouraged the building of hotels and other 
tourist facilities through loans. According to government statistics, 
between 1985 and 1988 the number of hotel rooms increased from 
under 22,000 to more than 27,000. 



138 



Porters at a rest stop along the route to Sedua 
Courtesy Linda Galantin 

Prior to the trade impasse with India that began in March 1989, 
tourism had grown by more than 10 percent per year for most of 
the 1980s. Between 1985 and 1988, the number of tourists increased 
from approximately 181,000 to about 266,000. More than 80 per- 
cent of the tourists arrived in the country by air. 

In FY 1985, more than US$40 million worth of foreign exchange 
was earned through tourism. By FY 1988, this amount had in- 
creased to more than US$64 million. In FY 1989, tourism account- 
ed for more than 3.5 percent of GDP and about 25 percent of total 
foreign exchange earnings. The 1989 trade and transit impasse with 
India negatively affected tourism because the transport and ser- 
vice sectors of the economy lacked supplies. Beginning in FY 1990, 
however, Kathmandu initiated a policy to allocate fuel on a pri- 
ority basis to tour operators and hotels. 

Problems and Prospects 

Nepal was a resource poor country. Although it had made some 
progress since the 1950s, it still was well behind most countries in 
the world as of 1991 . Among the issues it needed to address were 
changes in economic policy, international debt, low labor produc- 
tivity, income distribution, and population growth. 



139 



Nepal and Bhutan: Country Studies 

In the economic policy area, the performance of public enter- 
prises needed improvement. Most of the country's large-scale firms 
were in the public sector, and many of these enterprises either were 
protected or subsidized, which inhibited their efficiency. Most public 
enterprises also lacked a sound financial footing. More than fifty 
public enterprises dominated major sectors of the economy. These 
enterprises included energy, basic utilities, oil, telecommunications, 
water supply, cement, jute, tobacco, and sugar. Some of these en- 
terprises, for example, the Agricultural Inputs Corporation and 
the Nepal Food Corporation, incurred losses year after year. 

Foreign indebtedness was also problematic. Compared with many 
less-developed countries, Nepal's foreign debts were not very high. 
However, these debts were increasing. At the end of the 1980s, 
the value of merchandise imports was more than three times that 
of merchandise exports, a situation that could create future problems 
in the balance of payments. Many analysts believed that domestic 
borrowing for development expenditures would better serve de- 
velopment. 

Labor productivity needed to increase to improve the well-being 
of the people. Nepal suffered, however, from technology deficits, 
as well as from shortfalls in its literacy rate, basic science educa- 
tion, and technical training. Although there had been some progress 
in raising the literacy rate, properly trained technicians remained 
in short supply. 

Income distribution data on a large scale were not available. 
Nonetheless, some sample studies had been done. In 1990 Dr. B.P. 
Shreshtha found that 75 percent of the families accounted for less 
than 35 percent of income. A 1983 study by Blaikie et al. noted 
that more than 50 percent of the family landholdings in the Hill 
Region amounted to less than half a hectare. Only in the western 
Tarai Region were landholdings generally much bigger. In a coun- 
try where 90 percent of the population was largely dependent on 
agriculture, few families had landholdings exceeding four hectares, 
largely because of the shortage of land. 

The need for greater agricultural and labor productivity, as well 
as employment opportunities, to offset the demands of a growing 
populace was paramount. Of equal importance, however, were in- 
creased efforts at controlling population growth. With an annual 
population growth rate of 2.6 percent, per capita resources were 
reduced — another obstacle to further economic development. 

For general background material on the state of the economy 



140 



Nepal: The Economy 



prior to 1970, Yadav Prasad Pant's Problems in Fiscal and Monetary 
Policy, Rishikesh Shaha's Nepali Politics, and Badri Prasad 
Shreshtha's The Economy of Nepal provide useful information. Pierce 
M. Blaikie et al.'s Nepal in Crisis details the status of the economy 
in the 1970s, although it focuses on the western and central parts 
of the country. Mahesh Chandra Regmi's books on Nepal's eco- 
nomic history are valuable for their perspective and insight into 
continuing problems. For more recent assessments of the econo- 
my, Badri Prasad Shreshtha's Nepalese Economy in Retrospect and 
Prospect, Babu Ram Shrestha' s Managing External Assistance in Nepal, 
and the Far Eastern Economic Review's annual Asia Yearbook are 
helpful. Shrestha' s book also details the extent of foreign assistance 
in Nepal and provides some data on expenditures in some of the 
development plans. Economic Survey, 1987-88 and Economic Survey, 
1989-90, published by Nepal's Ministry of Finance, and Statistical 
Pocketbook, 1 988 and Statistical Pocketbook, 1990, published by Nepal's 
Central Bureau of Statistics, provide the most current statistical 
data. 

Yadav Prasad Pant and Badri Prasad Shreshtha, professional 
economists from Nepal, have held several posts in the government 
and have also written extensively about Nepal's economy. Although 
the aforementioned texts by Shreshtha and Pant's Problems in Fis- 
cal and Monetary Policy are difficult to obtain in the United States, 
they provide useful information. (For further information and com- 
plete citations, see Bibliography.) 



141 



Chapter 4. Nepal: Government and Politics 



Jang Bahadur Rana, founder of the Rana line of prime ministers, who 
reigned from 1846 to 1877 



THE DRAMATIC EVENTS of the beginning months of 1990 
marked a watershed in Nepal's political system. The quest for a 
multiparty, representative form of government had begun on 
December 15, 1960, when an unprecedented royal coup d'etat dis- 
missed the constitutionally elected government of Bishweshwar 
Prasad (B.P.) Koirala. King Mahendra Bir Bikram Shah Dev 
abrogated the constitution and suspended all guarantees of fun- 
damental rights and political activities. The traditional partyless 
panchayat (see Glossary) system of local and national assemblies im- 
posed by fiat was found unsatisfactory in the face of the Nepalese 
desire to secure legitimate political and human rights and estab- 
lish accountability in government. 

Monarchical opposition toward political parties or groups had 
been so vigorous that the centrist Nepali Congress Party, the oldest 
political party, carried on its activities from exile in India. Other 
political parties, including the splintered leftist groups, either oper- 
ated from abroad or were disbanded. Although political parties were 
banned and at times their leaders were incarcerated or forced to 
go underground, they remained a vital force in sensitizing and 
mobilizing public opinion against government authoritarianism. 

The Movement for the Restoration of Democracy (MRD), popu- 
larly known as the prodemocracy movement, finally succeeded in 
early 1990 in restoring democratic rights denied for decades by the 
powerful palace clique. In April 1990, tens of thousands of Nepa- 
lese marched on the royal palace in Kathmandu, demonstrating 
against King Birendra Bir Bikram Shah Dev, who was tradition- 
ally revered as an incarnation of the Hindu god Vishnu. Police 
and troops shot and killed many of the marchers. As shock waves 
reverberated through Nepal, long an oasis of civil order in South 
Asia, the king quickly scrapped the panchayat system, lifted the ban 
on political parties, and formed an interim government from among 
the ranks of the veteran opposition leaders under the premiership 
of Nepali Congress leader Krishna Prasad (K.P.) Bhattarai. 

The interim government, which represented the spectrum of pub- 
lic opinion, was directed to conduct fair and free elections within 
a stipulated period under a new constitution framed by an indepen- 
dent constitutional commission appointed by the Council of Minis- 
ters — the Constitution Recommendation Commission. Although 
the constitution was proclaimed from the throne, its development, 
unlike past constitutional edicts, was through a democratic process 



145 



Nepal and Bhutan: Country Studies 

in which the interim Council of Ministers served as a legislature. 
Nepal's human rights records — poor before the success of the 
prodemocracy movement — also improved. 

During the prodemocracy movement, a range of political par- 
ties acted in concert and rapidly commanded the loyalty and imag- 
ination of the overwhelming majority of the urban population. This 
unprecedented expression of national unity and the government's 
subsequent attempts to suppress the movement triggered the 
reactions of major and regional world powers including the United 
States, Japan, and India, and international financial institutions, 
such as the World Bank (see Glossary) and Asian Development Bank 
(see Glossary). Their timely expressions of concern and threats 
to reevaluate their commitments of economic and technical as- 
sistance both bolstered the movement and served as a damper 
against the monarchy's continued use of excessive force to contain it. 

Strategically wedged between China and India, Nepal has al- 
ways been fearful of foreign intervention and has tried to main- 
tain equal distance from these two powerful neighbors in a 
continuing effort to protect its sovereignty. Nepal's choice not to 
align with any superpower facilitated grants of economic assistance 
from diverse sources, including the United States, the Soviet 
Union, India, China, and Japan. Nepal maintained a high profile 
in various international organizations and activities and was a char- 
ter member of the South Asian Association for Regional Coopera- 
tion (SAARC — see Glossary). 

Although the vast majority of the Nepalese population was il- 
literate, Nepal's printed media have been influential as well as stri- 
dent. Before the introduction of the 1990 constitution, which 
guarantees freedom of expression, several stringent publication and 
censorship laws limited freedom of expression. 

Constitutional Development 

The Rana System 

Beginning in 1856, the center of power in Nepal rested with the 
Rana prime ministers, who retained sovereign power until the revo- 
lution of 1950-51 (see The Rana Oligarchy, ch. 1). Many of the 
nobles who participated in the consultative court called the Assembly 
of Lords, or Bharadari Sabha, had been slaughtered at the Kot 
Massacre in 1846. Following his official visit to Britain and Eu- 
rope in 1851, Jang Bahadur Kunwar (later called Jang Bahadur 
Rana) began to use the Bharadari Sabha as deliberative body for 



146 



Nepal: Government and Politics 



state affairs. For almost 100 years, this council served as a rubber 
stamp for the Rana autocracy. The next major effort at institu- 
tional development was initiated in 1947 by Padma Shamsher Rana, 
a liberal prime minister, who appointed a Constitutional Reform 
Committee to draft the first constitution. Known as the Govern- 
ment of Nepal Constitution Act, 1948, this constitution, written 
with the help of Indian advisers, superficially changed the Rana 
system. It established a bicameral legislative body. The entire mem- 
bership of one house and a majority of the other was selected by 
the prime minister, who could reject any measure that the legisla- 
ture might pass. There was a cabinet of at least five members, of 
whom at least two were chosen from among the few elected mem- 
bers of the legislature. 

The act also specified that a panchayat system of local self- 
government would be inaugurated in the villages, towns, and dis- 
tricts. It enumerated certain fundamental rights and duties, which 
included freedoms of speech, the press, assembly, and worship; 
equality before the law; free elementary education for all; and equal 
and universal suffrage. Despite the appearance of reform, the al- 
terations made in the Rana system by the constitution were slight. 
The more conservative Ranas perceived the constitution as a dan- 
gerous precedent, forced Padma Shamsher to resign, and suspended 
promulgation of the constitution. The constitution became effec- 
tive in September 1950 but remained in force only until February 
1951, when the Rana monopoly was broken and the creation of 
a new constitutional system began. 

The Interim Constitution, 1951 

The revolution of 1950-51 resulted in the overthrow of the Rana 
system (see The Growth of Political Parties; The Return of the 
King, ch. 1). In 1951 King Tribhuvan Bir Bikram Shah announced 
by royal proclamation an interim government and an interim con- 
stitution until a new Constituent Assembly could be elected. The 
interim constitution, based on principles in India's constitution and 
entitled the Interim Government of Nepal Act, 1951, ratified the 
end of the authority of the prime minister and the system surround- 
ing that office. It also reasserted the king's supreme executive, legis- 
lative, and judicial powers. The king exercised his executive 
authority through, and was aided and advised by, a Council of 
Ministers, which he appointed and which served at his pleasure. 

The king also appointed an Advising Assembly to sit until the 
Constituent Assembly was elected. The king retained sovereign and 
plenary legislative powers. The Advising Assembly was, with certain 
exceptions, authorized only to discuss matters and to recommend 



147 



Nepal and Bhutan: Country Studies 

measures to the king for enactment into law. The final authority 
to approve any legislative measure lay with the king. The consti- 
tution also established a Supreme Court, made the king supreme 
commander of the armed forces, reiterated and enlarged upon the 
fundamental rights included in the Rana constitution, and 
proclaimed numerous social and economic objectives of the govern- 
ment. These objectives were to promote the welfare of the people 
by securing a social order in which social, economic, and political 
justice pervaded all the institutions of national life. King Mahen- 
dra (reigned 1955-72) vigorously sought to broaden the monarch's 
political base, but the Nepali National Congress succeeded in gain- 
ing some democratic reforms. Although the constitution was ex- 
pected to be temporary pending the election of a Constituent 
Assembly and the preparation of a permanent organic law, King 
Mahendra was unable to resist the increasingly well-orchestrated 
political demands by the Nepali National Congress for a more 
democratic and representative government, and was forced to 
promulgate a new constitution. 

The Royal Constitution of 1959 

The most significant aspect of the constitution of 1959 was that 
it was granted by the king rather than drawn up by elected represen- 
tatives of the people as had been specified in the 1951 constitu- 
tion. Although the constitution formally brought into being a 
democratically elected parliamentary system under a constitutional 
monarchy, the king retained ultimate sovereignty, even though the 
document itself did not explicitly grant this power. 

The 1959 constitution, modeled on British and Indian constitu- 
tional custom, vested executive power in the king, who was ad- 
vised and assisted by a Council of State (Raj Sabha) and a Council 
of Ministers (cabinet). The Council of State, which consisted of 
officers of Parliament, ministers ex officio, former ministers, and 
royal appointees, advised the monarch on legislation and handled 
the details of regency and succession in the event of his death or 
disability. The general direction and control of the government were 
entrusted to the Council of Ministers, headed by a prime minister 
required to command a majority in the lower house of Parliament, 
to which the council was collectively responsible. 

The king was an integral part of the legislative arm of the govern- 
ment. Parliament was defined as consisting of the king; the House 
of Representatives, composed of 109 popularly elected members; 
and the Senate, composed of 36 members of whom half were elected 
by the house and half were nominated by the king. All bills ap- 
proved by the two houses required the assent of the king to become 



148 



Nepal: Government and Politics 



law. The constitution granted the king wide latitude to nullify the 
parliamentary system. The king could suspend the operation of 
the cabinet and perform its functions himself if he determined that 
no person could command a majority in the house as prime 
minister. In the event of a breakdown of the parliamentary sys- 
tem or of any one of a number of emergency conditions, the king 
could suspend either or both houses of Parliament, assume their 
powers, and suspend the constitution in whole or part. In Decem- 
ber 1960, King Mahendra invoked these emergency powers to dis- 
solve the Nepali Congress Party government. The constitutional 
system that had prevailed before 1959 was then returned to opera- 
tion (see The Democratic Experiment, ch. 1). 

The Panchayat Constitution, 1962 

By royal proclamation on December 16, 1962, King Mahendra 
announced a new constitution that radically reformed the 1959 con- 
stitution but also adopted many features of the Rana system (see 
The Panchayat System under King Mahehdra, ch. 1 ; The Adminis- 
trative System, this ch.). Known as the Panchayat Constitution, 
it was the fourth constitution in fifteen years. 

The panchayat system was an institution of great antiquity. Histor- 
ically, each caste group system of Nepal formed its own panchayat, 
or council of elders, a sociopolitical organization operational on 
a village level that could expand to include neighboring districts, 
or even function on a zonal basis. Although it could be argued that 
the panchayat system was adopted from India, King Mahendra had 
argued for its incorporation at the national level as an exponent 
of Nepalese culture — a worthy and historically correct representa- 
tion of cultural expression. 

The 1962 constitution was based on some elements from other 
"guided democracy" constitutional experiments — notably "Ba- 
sic Democracy" in Pakistan, "Guided Democracy" in Indonesia, 
and the "Dominant Party System" in Egypt. The Panchayat Con- 
stitution not only codified the irrelevance of political parties, but 
also declared them illegal. 

The 1962 constitution contained a stronger and more explicit 
statement of royal authority than did previous constitutions. Real 
power remained with the king, who was the sole source of authority 
and had the power not only to amend the constitution but also to 
suspend it by royal proclamation during emergencies. The Coun- 
cil of Ministers, selected from the members of the legislative 
(Rashtriya Panchayat, or National Panchayat), served as an advi- 
sory body to the king. Members of the Rashtriya Panchayat were 
elected indirectly by the members of local panchayat as well as by 



149 



Nepal and Bhutan: Country Studies 

the members of professional and class organizations such as the 
Nepal Workers' Organization, the Nepal Ex-servicemen's Organi- 
zation, and the Nepal Youth Organization. The constitution 
abolished all political parties. 

Constitutional Amendments 

The Panchayat Constitution was amended several times, primar- 
ily to increase the power and prerogatives of the monarchy against 
the increasing popular demand for liberalization of the political in- 
stitutions and processes. In view of the mounting criticism against 
the Panchayat Constitution, King Birendra, who had succeeded 
his father in 1972, pursuant to recommendations of a specially creat- 
ed Constitutional Reform Commission, announced in 1975 that 
the constitution would be amended to include provisions govern- 
ing the amending procedure itself. Previously the king could not 
amend the constitution unless two-thirds of the Rashtriya Panchayat 
ratified the proposed amendment. Under the proposed amendment, 
the king would have to consult a special committee of the Rastriya 
Panchayat before amending the constitution. In addition, the term 
of a delegate to the Rashtriya Panchayat was reduced from six years 
to four years. 

The Referendum of 1980 

In May 1979, concerned by the unabated political demonstra- 
tions and considerable general unrest, King Birendra called for a 
nationwide referendum to determine the future form of govern- 
ment. The referendum offered two choices: a continuation of the 
partyless panchayat system, with prospects for further reform; or 
a multiparty system. Although no clear definition of a multiparty 
system was provided, the implication was that it stood for a 
parliamentary system of government run on a party basis. The 
referendum, the first nationwide vote in twenty-two years, was held 
on May 2, 1980, and 67 percent of the eligible voters participated. 
The panchayat system was chosen with a majority of 54.7 percent 
of the votes. On May 21, 1980, the king appointed an eleven- 
member Constitution Reforms Commission to be chaired by the 
acting chief justice of the Supreme Court (see The Judiciary, this 
ch.). On December 15, the king promulgated three constitutional 
amendments: direct elections to the Rashtriya Panchayat would 
be held every five years for 112 seats, with 28 additional seats filled 
by the king's personal nomination; the prime minister would be 
elected by the Rashtriya Panchayat; the cabinet would be appointed 
by the king on the recommendation of the prime minister and would 
be accountable to the Rashtriya Panchayat; and Nepal would 



150 



King Birendra 
Bir Bikram Shah Dev 



Queen Aishwarya Rajya 
Laxmi Devi Rana 
Courtesy 

Royal Nepalese Embassy 



Nepal and Bhutan: Country Studies 

commit to the Nonaligned Movement as a zone of peace. These 
provisions, with a few minor modifications, remained in opera- 
tion until early 1990, when the prodemocracy movement success- 
fully agitated for a multiparty democratic system. 

The Constitution of 1990 

Widespread prodemocracy protests toppled the panchayat system 
in April 1990. The king appointed an independent Constitution 
Recommendation Commission to represent the main opposition 
factions and to prepare a new constitution to accommodate their 
demands for political reform. On September 10, 1990, the com- 
mission presented King Birendra with the draft of a new constitu- 
tion, which would preserve the king's status as chief of state under 
a constitutional monarchy but establish a multiparty democracy 
with separation of powers and human rights. As agreed upon earlier, 
the king turned the draft constitution over to Prime Minister K.P. 
Bhattarai and his cabinet for review and recommendations. The 
draft was discussed extensively and approved by the interim cabinet. 
A major obstacle to approval was avoided when the commission 
removed a disputed provision under which both the constitutional 
monarchy and multiparty system could have been eliminated by 
a three-quarters majority vote of Parliament. 

On November 9, 1990, King Birendra promulgated the new con- 
stitution and abrogated the constitution of 1962. The 1990 consti- 
tution ended almost thirty years of absolute monarchy in which 
the palace had dominated every aspect of political life and politi- 
cal parties were banned. 

The constitution, broadly based on British practice, is the fun- 
damental law of Nepal. It vests sovereignty in the people and 
declares Nepal a multiethnic, multilingual, democratic, indepen- 
dent, indivisible, sovereign, and constitutional monarchical king- 
dom. The national and official language of Nepal is Nepali in the 
Devanagari script. All other languages spoken as the mother 
tongue in the various parts of Nepal are recognized as languages 
of the nation (see Caste and Ethnicity, ch. 2). Although Nepal still 
is officially regarded as a Hindu kingdom, the constitution also gives 
religious and cultural freedom to other religious groups, such as 
Buddhists, Muslims, and Christians. The preamble of the consti- 
tution recognizes the desire of the Nepalese people to bring about 
constitutional changes with the objective of obtaining social, politi- 
cal, and economic justice. It envisages the guarantee of basic human 
rights to every citizen, a parliamentary system of government, and 
a multiparty democracy. It also aims to establish an independent 



152 



Nepal: Government and Politics 



and competent system of justice with a view to transforming the 
concept of the rule of law into reality. 

Other safeguards include the right to property; the right to con- 
serve and promote one's language, script, and culture; the right 
to education in the student's mother tongue; freedom of religion; 
and the right to manage and protect religious places and trusts. 
Traffic in human slavery, serfdom, forced labor, or child labor in 
any form is prohibited. The right to receive information about mat- 
ters of public importance and the right to secrecy and inviolability 
of one's person, residence, property, documents, letters, and other 
information also are guaranteed. 

Part three of the constitution provides for the fundamental rights 
of citizens. Although some elements of fundamental rights guaran- 
teed in the 1962 constitution are reflected in the 1990 constitution, 
the latter provides new safeguards in unequivocal language and 
does not encumber the fundamental rights with duties or restric- 
tions purported to uphold public good. All citizens are equal be- 
fore the law, and no discrimination can be made on the basis of 
religion, race, sex, caste, tribe, or ideology. No person shall, on 
the basis of caste, be discriminated against as an untouchable, be 
denied access to any public place, or be deprived from the use of 
public utilities. No discrimination will be allowed in regard to 
remuneration for men and women for the same work. No citizen 
can be exiled or be deprived of liberty except in accordance with 
the law; and capital punishment is disallowed. 

In addition, sections on fundamental rights provide for freedom 
of thought and expression; freedom to assemble peacefully and 
without arms; freedom to form unions and associations; freedom 
to move and reside in any part of Nepal; and freedom to carry 
out any profession, occupation, trade, or industry. Similarly, pri- 
or censorship of publications is prohibited, and free press and print- 
ing are guaranteed. Unfettered cultural and educational rights also 
are guaranteed. Articles 23 and 88 provide for a citizen's right to 
constitutional remedy. Any citizen can petition the Supreme Court 
to declare any law or part thereof as void if it infringes on the fun- 
damental rights conferred by the constitution. 

Rights regarding criminal justice include the guarantee that no 
person will be punished for an act unpunishable by law or subject- 
ed to a punishment greater than that prescribed by the laws in ex- 
istence at the time of commission of the offense; no person will be 
prosecuted more than once in any offense; and no one will be com- 
pelled to bear witness against himself or herself (see The Judicial 
System, ch. 5). Inflicting cruelty on a person in detention is pro- 
hibited, as is detaining a person without giving information about 



153 



Nepal and Bhutan: Country Studies 

the grounds for such detention. Further, the person in detention 
must be produced within twenty-four hours of such arrest before 
the judicial authorities. Any person wrongly detained will be com- 
pensated. 

The constitution lays down various directives in matters of po- 
litical, economic, and social development, and foreign policy. These 
lofty policies are guidelines to promote conditions of welfare on 
the basis of the principles of an open society. One objective is to 
transform the national economy into an independent and self-reliant 
system by making arrangements for the equitable distribution of 
the economic gains on the basis of social justice. The constitution 
stresses the creation of conditions for the enjoyment of the fruits 
of democracy through the maximum participation of the people 
in governance of the country. Other aims include the pursuit of 
a policy in international relations that will enhance the dignity of 
the nation and ensure sovereignty, integrity, and national indepen- 
dence and the protection of the environment from further ecologi- 
cal damage. 

Other Features of the Constitution 

The constitution guarantees the citizens' unfettered rights to po- 
litical pluralism and a multiparty democracy. All legitimate politi- 
cal organizations or parties that register with the Election 
Commission are allowed to publicize and broadcast for the pur- 
pose of securing support and cooperation of the general public 
toward their objectives and programs. Any law, arrangement, or 
decision that restricts any of these activities is inconsistent with the 
constitution and void. Any law, arrangement, or decision to im- 
pose a one-party system is also inconsistent with the constitution 
and void. Under the section on political organization, any politi- 
cal party is not eligible for registration if it discriminates, if at least 
5 percent of its candidates are not women, or if it fails to obtain 
at least 3 percent of the total votes cast in the previous election to 
the House of Representatives. 

The constitution may be amended or repealed by a majority of 
two-thirds in each house of Parliament. However, such amendment 
or repeals may not be designed to frustrate the spirit of the pream- 
ble of the constitution, which recognizes the Nepalese people as the 
source of sovereign authority. After passage in both houses, any 
bill to repeal or amend the constitution must receive royal assent. 

The Executive 

Executive powers are vested in the king and the Council of 
Ministers — a prime minister, deputy prime minister, and other 



154 



Nepal: Government and Politics 



ministers as required. The direction, supervision, and conduct of 
the general administration of the country are the responsibility of 
the Council of Ministers. All transactions made in the name of the 
king, except those within his exclusive domain, are authenticated 
by the Council of Ministers (see fig. 10). 

The king appoints the leader of the political party commanding 
a majority in the House of Representatives as prime minister. If 
a single party does not have a majority in the house, the member 
commanding a majority on the basis of two or more parties is asked 
to form the government. When this alternative also is not possible, 
the king may ask the leader of a party holding the largest number 
of seats in the house to form the government. In this case, the lead- 
er forming the government must obtain a vote of confidence in the 
house within thirty days. If a vote of no confidence is obtained, the 
king will dissolve the house and order new elections within six 
months. Other ministers are appointed by the king from members 
of Parliament on the recommendation of the prime minister. 

The constitution declares the king the symbol of the nation and 
the unity of its people. Expenditures and privileges of the king and 
royal family are determined by law. The king is obliged to obey 
and protect the constitution. Although, as in previous constitutions 
the monarch remains the supreme commander of the Royal Nepal 
Army, a three-member National Defence Council, headed by the 
prime minister, commands the military (see Legal Basis Under the 
1990 Constitution, ch. 5). Nonetheless, the king retains his power 
over the army because if there were a threat to sovereignty, in- 
divisibility, or security because of war, foreign aggression, armed 
revolt, or extreme economic depression, he could declare a state 
of emergency. During the period of emergency — which would have 
to be approved by the House of Representatives within three months 
and which would remain in effect for six months from the date of 
its announcement, renewable for six months — fundamental rights, 
with the exception of the right of habeas corpus, could be suspended. 
Additional prerogatives of the king include the power to grant 
pardons; suspend, commute, or remit any sentence passed by any 
court; confer titles, honors, or decorations of the kingdom; appoint 
all ambassadors and emissaries for the kingdom; and remove any 
barriers to enforcing the constitution. The king also nominates the 
members of the Raj Parishad (King's Council), the body that de- 
termines the accession to the throne of the heir apparent. 

The Legislature 

The constitution provides for a bicameral legislature, the Parlia- 
ment. This body consists of the king and two houses, the House 



155 



Nepal and Bhutan: Country Studies 







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Nepal: Government and Politics 



of Representatives (Pratinidhi Sabha) and the National Council 
(Rashtriya Sabha). The House of Representatives has 205 direct- 
ly elected members. The term for the House of Representatives 
is five years unless it dissolves earlier, pursuant to the provisions 
of the constitution. On the recommendation of the prime minister, 
the king may dissolve the house, but new elections must be held 
within six months. Administrative districts are the election districts; 
and each district's allocation of seats is proportional to its popula- 
tion. All persons eighteen years or older are enfranchised. 

The National Council has sixty members consisting of ten 
nominees of the king; thirty-five members, including at least three 
women, to be elected by the House of Representatives by means 
of a single transferable vote, pursuant to the system of proportion- 
al representation; and fifteen members to be elected by the elec- 
toral college comprising the voters, including the chair and deputy 
chair of the village and town and district committees of various 
development regions. The National Council is a permanent body; 
one-third of its members must retire every two years. Council mem- 
bers serve six-year terms. 

With the exception of finance bills, introduced only in the House 
of Representatives, bills may be introduced in either house. All 
bills, however, must be passed by both houses before receiving royal 
assent. When a bill is rejected by the National Council, the House 
of Representatives has the overriding authority. If the joint ses- 
sion of Parliament receives and passes a bill that the king returned 
for reconsideration, it receives royal assent within thirty days. The 
king may, when both the Houses of Parliament are not in session, 
promulgate ordinances, which are not effective unless approved 
by both the houses when reconvened. Financial procedures are out- 
lined in part ten of the constitution, which states that taxes cannot 
be levied or loans raised except in accordance with the law. 

The Judiciary 

An independent judiciary, unencumbered by the executive 
branch of the government and palace interference, was a stated 
goal of all political parties. Of the many changes which have taken 
place since the fall of the Ranas in 1951, among the most striking 
have been the growing autonomy of the courts and the gradual 
liberalization of many basic judicial principles. Despite major im- 
provements, however, the judicial system has suffered from serious 
impediments in providing speedy, expeditious, and equal justice. 
The independence and integrity of the judiciary were repeatedly 
questioned in the press; intervention of political figures and govern- 
ment officials in the judicial process was a frequent occurrence; 



157 



Nepal and Bhutan: Country Studies 

and caste and economic status were important determinants of the 
availability of justice. 

The court system formerly was one of many instruments used 
by the prime minister to maintain the authoritarian rule of the Rana 
family, and the concepts of law it applied were arbitrary, puni- 
tive, and oppressive. After an initial attempt to keep the judiciary 
subordinate when the monarchy was restored, it was allowed to 
become a relatively independent branch of government. Reforms 
in the legal system rendered both substantive and procedural law 
progressively more systematic. 

Never clearly demarcated, the jurisdiction of the courts became 
further complicated with the introduction of the panchayat system, 
which at the local level exercised some quasijudicial functions. 
Therefore, the fundamental role of the judiciary and its position 
within the government became a subject of national focus during 
the prodemocracy movement. 

According to the constitution, the courts comprise three tiers: 
the Supreme Court, appellate courts, and district courts. In addi- 
tion, courts or tribunals may be constituted for the purpose of hear- 
ing special types of cases (see The Police System, ch. 5). 

The Supreme Court is the highest court. All other courts and 
institutions exercising judicial powers, except the military courts, 
are under its jurisdiction. The Supreme Court has the authority 
to inspect, supervise, and give directives to all subordinate courts 
and all other institutions that exercise judicial powers. The Supreme 
Court has both original and appellate jurisdiction and consists of 
a chief justice and fourteen other judges. 

The chief justice is appointed on the recommendation of the Con- 
stitutional Council. Other judges of the Supreme Court, appellate 
courts, and district courts are appointed on the recommendation 
of the Judicial Council. All appointments are made by the king. 
The tenure of office of the chief justice is limited to seven years 
from the date of appointment. Supreme Court justices can be im- 
peached in the House of Representatives for reasons of incapaci- 
ty, misbehavior, or malafide acts while in office. The Judicial 
Council, presided over by the chief justice of the Supreme Court, 
makes recommendations and advises on appointments, transfers, 
and disciplinary actions of the judges and other matters relating 
to judicial administration. 

All appointments, promotions, transfers, and disciplinary actions 
of the judges of the appellate and district courts are under the juris- 
diction of the Judicial Council. An independent Judicial Service 
Commission, appointed by the king, and with the chief justice of the 
Supreme Court serving as ex-officio chairman, appoints, transfers, 



158 



Nepal: Government and Politics 



promotes, and provides departmental punishment of the gazetted 
officers of the civil service. 

An Abuse of Authority Investigating Commission is empowered 
to investigate the misuse of authority or corruption by public offi- 
cials. Members of the commission have no specific party affilia- 
tion and are appointed by the king on the recommendation of the 
Constitutional Council. 

The Supreme Court is the supreme judicial authority of the na- 
tion. All orders and decisions made by the court are binding. Any 
interpretation of a law or any legal principle laid down by the court 
is binding on all, including the king. 

As a guarantor of personal liberty and fundamental rights con- 
ferred by the constitution, the Supreme Court has the authority 
to declare a law as void ab initio if it finds that the impugned law 
contravenes the provisions of the constitution. The Supreme Court 
also has the power to issue appropriate orders and writs, includ- 
ing habeas corpus, mandamus, certiorari, prohibition, and quo 
warranto. 

The Civil Service 

The Nepal Civil Service Act, passed in 1956, classified all civil 
employees of the government into two categories — gazetted ser- 
vices and nongazetted services. Gazetted services included all ser- 
vices prescribed by the government by notification in the Nepal Raj 
Patra, the government gazette. In 1991 categories of the gazetted 
services were education, judicial, health, administrative, engineer- 
ing, forest, agricultural, and miscellaneous services. The gazetted 
posts were further grouped into classes I, II, and III. Nongazetted 
posts also had several class echelons. As of 1990, there were ap- 
proximately 80,000 civil service employees in all ranks. 

According to the 1990 constitution, all members of the civil ser- 
vice are recruited through an open competitive examination con- 
ducted by the Public Service Commission. Police and military 
officers are excluded from the jurisdiction of the commission. The 
chairman and other members of the commission are appointed by 
the king on the recommendation of the Constitutional Council. The 
commission must be consulted in all matters concerning laws relat- 
ing to the civil service — such as appointment, promotion, trans- 
fer, or departmental punishment. Tenure, benefits, and postings 
were regulated by the Nepal Civil Service Act of 1956. 

The Administrative System 

The panchayat system represented "democracy at the grassroots," 
and until April 1990 it included four integrated levels: local or 



159 



Nepal and Bhutan: Country Studies 

village, district, zonal, and national — the Rashtriya Panchayat. 
Only the village panchayat was directly elected by the people. Cham- 
pioning panchayat rule as a political system, King Mahendra was 
able to tap into nascent Nepalese nationalism and also to outmaneu- 
ver the evolving political parties which had posed a challenge to 
the monarchy's vested power. 

The country was divided into fourteen zones and seventy-five 
districts in support of the complex hierarchy of the panchayat sys- 
tem. The lowest unit of government was the gaun panchayat (village 
committee or council), of which there were 3,524. A locality with 
a population of more than 10,000 persons was organized as a nagar 
panchayat (town committee or council). The number of nagar pan- 
chayat varied from zone to zone. Above the gaun panchayat and nagar 
panchayat was the district panchayat, of which there were seventy- 
five. At the apex of the panchayat system was the Rashtriya Pan- 
chayat, which served as the unicameral national legislature from 
1962 until 1990. 

The district panchayat had broad powers for supervising and coor- 
dinating the development programs of the village and carried out 
development projects through the district development boards and 
centers. Each of the seventy-five districts was headed by a chief 
district officer, who was an elected official, responsible for main- 
taining law and order, and for coordinating the work of the field 
agencies of the various ministries. 

The zonal panchayat was responsible for implementing develop- 
ment plans forwarded by the central government, formulating and 
executing programs of its own, and planning, supervising, and coor- 
dinating district development programs within its jurisdiction. Zonal 
commissioners exercised full administrative and quasijudicial pow- 
ers. Each zone was administered by a zonal commissioner and one 
or two assistant zonal commissioners, all directly appointed by the 
king. Zones and districts were further regrouped into five develop- 
ment zones in 1971-72, an administrative division that remained 
in effect in 1991. 

A drive for political liberalization, which had begun shortly af- 
ter the 1959 constitution was abrogated and all political activities 
were banned in 1960, did not climax until the prodemocracy move- 
ment of 1990. At that point, ongoing debilitating interparty con- 
flicts and halting demands for reforms of the political system ended, 
and national energy focused on a movement to achieve democrat- 
ic rights. During the prodemocracy movement, some of the pane ha 
{panchayat members) loyalists even were openly friendly with their 
former adversaries. 



160 



sr 




Royal palace, Kathmandu 
Courtesy Janet MacDonald 

The interim government that was installed in April 1990 con- 
sisted of strange bedfellows, who, however, succeeded in steering 
the nation to its first free and fair elections in thirty-two years. In 
April 1990, the nagar panchayat was renamed nagar polika (municipal 
development committee), and the gaun panchayat became gaun bikas 
samiti, or village development committee. The Ministry of Local 
Development posted an officer to each district to help with the var- 
ious programs of the development committees. In mid- 1991, a 
Nepali Congress Party government was in power, and a conglomer- 
ate of communist parties was playing the role of constitutional 
opposition. At that time, there were 4,015 village development com- 
mittees and thirty-three municipal development committees. Elec- 
tions for the heads of the development committees were scheduled 
for June 1992. 

Political Dynamics 

The Panchayat System 

For centuries the government had been run by a number of 
interrelated aristocratic families. Despite the limitations of a royal 
ban on political parties and other impediments, political parties 
did exist and operated clandestinely. To escape harassment or 



161 



Nepal and Bhutan: Country Studies 

imprisonment, many political leaders went to India, where they 
also received logistical and other support. 

Under the panchayat system, there were six government-sponsored 
class and professional organizations for peasants, laborers, students, 
women, former military personnel, and college graduates. These 
organizations were substitutes for the prohibited political parties 
and provided alternate channels for the articulation of group or 
class — rather than national — interests. The professional and class 
organizations were warned repeatedly against engaging in politi- 
cal activity; nevertheless, they offered the only political forum open 
to many Nepalese, and even some Nepali Congress Party and com- 
munist partisans considered them worthy of infiltration. 

The king also launched an independent national student associ- 
ation, the National Independent Student Council (Rashtriya 
Swatantra Vidyarthi Parishad), to control the political activities 
of the students. The association failed to gain support, and suc- 
cessful student agitation in 1979 forced the king not only to abol- 
ish it but also to initiate constitutional reforms leading to the national 
referendum of 1980. Also in 1980, a group of dissident pancha 
brought a no-confidence motion against Prime Minister Surya Ba- 
hadur Thapa on charges of bureaucratic corruption, food short- 
ages, and lack of economic discipline. Surya Bahadur, however, 
was a perennial political survivor and was returned to office in 1981 . 

King Birendra devised the Back-to-the-Village National Cam- 
paign (BVNC) in 1975. The BVNC was intended to circumvent 
the possibility of opposition within the panchayat and to create a 
loyal core of elites to select and endorse candidates for political office, 
thereby neutralizing the influence of underground political party 
organizers in the rural areas. Although it was envisioned as a 
means to mobilize the people for the implementation of development 
plans and projects, the shortlived BVNC — it was suspended in 
1979 — was in reality an ideological campaign to reinforce the im- 
portance of the partyless system. The campaign stressed that the 
partyless system was appropriate to the ways of the Nepalese peo- 
ple; the party system was a divisive and culturally alien institution. 

Each zonal committee had a BVNC structure, with a secretary 
nominated by the king. The BVNC network was extended to the 
district and village levels so as to reinforce a national communica- 
tion system. However inasmuch as the government paid the BVNC 
central and zonal committee members and restricted chances for 
popular participation, the committees carried out the same activi- 
ties as the panchayat. In actuality, the BVNC was created by the 
king to ensure a loyal organization and circumvent active party 
members from gaining seats in the panchayat elections. The BVNC 



162 



Nepal: Government and Politics 



became an organization of centrally controlled loyal panchayat elites 
and an insurance policy for palace initiatives. 

The only significant opposition to the monarchy came from the 
Nepali Congress Party, which operated from exile in India. Other 
parties either accepted and operated within the panchayat system 
on a supposedly nonpartisan basis or merged with the exiled Nepali 
Congress Party, polarizing politics over the issue of monarchical 
rule. Even the Communist Party of Nepal, divided on the tactical 
question of whether to seek the direct and immediate overthrow 
of the monarchical system or to work within it, had split into 
factions — a radical wing operated in India and a moderate wing 
underground in Nepal. Some party members, to gain tactical ad- 
vantage over the Nepali Congress Party, entered the panchayat sys- 
tem with the tacit approval of the palace. 

Ethnic plurality, income disparity, linguistic diversity, pervading 
regional loyalties, underdeveloped communications, and a paucity 
of written and electronic media also hindered party organization. 
The dominant high-caste political leaders were more interested in 
sharing or gaining access to power than in developing lasting foun- 
dations for party politics. 

Reportedly, before political organizations were banned, there 
were sixty-nine political parties, most of which were characteristi- 
cally fluid in their membership and inconsistent in their loyalties. 
Personalities rather than ideologies brought individuals and groups 
under the nominal canopy of a party. Fragmentation, recombina- 
tion, and alliances for convenience were the outstanding aspects 
of party behavior. 

In the polarized political climate, the monarchy looked at the 
panchayat system as its only dependable support base. The panchayat 
apparatus provided access for politically motivated individuals to 
form a new elite. Although the political leadership and following 
of the Nepali Congress Party initially stayed away from the pan- 
chayat system, over time, and in the absence of an oudet for politi- 
cal activities, some defections took place. Nevertheless, the lateral 
entry of some pro-Nepali Congress Party elements did not sub- 
stantially change the character of the panchayat leadership, which 
was dominated by rural elites of the Hill Region rather than the 
urban Kathmandu and Tarai Region elites who had been in the 
forefront of political activities. The system was designed so that 
the established parties would gradually shrink and lose their in- 
fluence and control. Once the new panchayat leadership matured, 
however, some members became restive under the excessive con- 
trol of the palace. This group of the panchayat elite opposed the sys- 
tem from within and overtly joined the prodemocracy movement. 



163 



Nepal and Bhutan: Country Studies 

In the last four decades, there has been significant progress 
towards democracy in Nepal's traditionally authoritarian political 
system. The first national elections in Nepal took place in 1959 — 
some eight years after the overthrow of the Rana system. The Nepali 
Congress Party-dominated government, victorious in the 1959 
parliamentary elections, was overthrown by King Mahendra within 
two years — resulting in the ban on political parties. The pattern 
that developed over the following decades was that of a monarchy 
reinforcing its power through the traditional institution of the pan- 
chayat. The panchayat system, co-opted and easily manipulated by 
the monarchy to suit its political ends, nevertheless was slowly but 
steadily subjected to pressures to change. Over time the monar- 
chy was forced by necessity to expand the role of elections in 
response to the mounting discontent of a citizenry living in an age 
of heightened political awareness and rising expectations. This trend 
culminated in May 1991 with the first truly free elections in over 
thirty years, ushering in a new political era. The Nepali Congress 
Party obtained a workable majority within the framework of a con- 
stitutional monarchy and affirmed the rise of a nascent democratic 
force. 

One of the ramifications of the prodemocracy movement was 
the beginning of a process of integration in national politics and 
decision making. With an elected Parliament and demands for an 
equitable allocation of resources to different regions, it was likely 
that all regions would compete for equality in national politics and 
that the monopoly of power by select families would erode, as would 
the excessive influence of the Kathmandu Valley Brahman, Chhetri, 
and Newar elites. 

At the beginning of 1990, the panchayat system still dominated 
Nepal. Although the institution itself was the object of derision from 
opponents of the panchayat system, it appeared unthreatened. Within 
a few months, however, its position eroded and then crumbled with 
bewildering speed. The surge of the successful prodemocracy move- 
ment sweeping Eastern Europe, parts of the Soviet Union, and 
several Asian countries profoundly inspired the Nepalese people. 
Also contributing to the sudden transformation were the economic 
woes of Nepal, exacerbated by India's refusal to renew a trade and 
transit agreement; widespread bureaucratic inefficiency and cor- 
ruption at all levels of government; the misgivings openly expressed 
by the international donors over the country's inefficient use of 
aid; and a deplorable record on human rights. 

In January 1990, the Nepali Congress Party held its first na- 
tional convention in thirty years in Kathmandu. It was well at- 
tended by party delegates from all districts and observers from all 



164 



Nepal: Government and Politics 



political parties. Also present was a multiparty delegation from In- 
dia, headed by Janata Dal (People's Party) leader Chandra Shek- 
har, who subsequently became India's prime minister. The Nepali 
Congress Party cooperated with the United Left Front parties, a 
coalition of seven communist factions, in a joint program to replace 
the panchayat system with a multiparty political system and launched 
the Movement for the Restoration of Democracy, or prodemocracy 
movement. 

Beginning on February 18, 1990 — the thirty-ninth anniversary 
of King Tribhuvan's declaration of a multiparty democracy and 
the thirtieth anniversary of the antidemocratic usurpation of pow- 
er by the palace — a series of spontaneous and sometimes turbu- 
lent mass demonstrations rocked major cities. People took to the 
streets to demand the restoration of a multiparty democracy, hu- 
man rights, and fundamental freedoms. The success of the Kath- 
mandu bandh (general strike) by prodemocracy forces on March 
2 was repeated in other parts of the country over the course of seven 
weeks. By the time the movement succeeded in totally uprooting 
the panchayat system, at least fifty people were dead, and thousands 
were injured as a result of the force used by the authorities in sup- 
pressing the agitation. The government also had incarcerated na- 
tional and district-level leaders of both the Nepali Congress Party 
and the United Left Front. 

Unable to contain the widespread public agitation against the 
panchayat system and the mounting casualties, and fearing for the 
survival of his own monarchical status, King Birendra lifted the 
ban on political parties on April 8. The unrest persisted. In the 
midst of continued violence, a royal proclamation on April 16 dis- 
solved the Rashtriya Panchayat and invalidated provisions of the 
1962 constitution inconsistent with multiparty democracy. The next 
day, the king named Nepali Congress Party President K.P. Bhat- 
tarai, a moderate who had spent fourteen years as a political 
prisoner, as prime minister and head of the interim government. 
The government also freed all political prisoners, lifted control of 
all domestic and foreign publications, and established a commis- 
sion, known as the Mullick Commission, to investigate the recent 
loss of life and property. 

The eleven-member Bhattarai cabinet, composed of four mem- 
bers of the Nepali Congress Party, three members of the United 
Left Front, two human rights activists, and two royal nominees, 
was immediately entrusted with the task of preparing a new constitu- 
tion and holding a general election. Pending the adoption of a new 
constitution, the interim government agreed that Nepal should re- 
main under the 1962 constitution. In the interest of continuity and 



165 



Nepal and Bhutan: Country Studies 

orderly management of public business, the interim government 
resisted demands from the left for a mass purge of the bureaucracy 
and die-hard panchayat elements. Bhattarai's goal was national recon- 
ciliation in a multiparty democracy. 

After nine months of politicking, the constitution was proclaimed 
on November 9, 1990. Elections to the House of Representatives 
were held on May 12, 1991. The new government faced the im- 
mediate problems of restoring law and order, providing economic 
relief to the populace, and establishing its claim to sound adminis- 
tration, a somewhat difficult task because the parties of the interim 
government had been in the opposition for a long period of time. 
Furthermore, pro-panchayat thugs who had tried to foment chaos 
and law and order problems to discredit the new government had 
to be brought under control. The situation improved as many 
former panchayat leaders who had previously supported moves for 
a multiparty democracy openly supported the political changes and 
offered to cooperate with the new government — taking advantage 
of political opportunism. 

Political Parties 

The Nepali Congress Party 

The Nepali Congress Party, a reform-oriented centrist party, 
has been in continuous operation since it was founded under a slight- 
ly different name in 1947. Elected to office in 1959 in a landslide 
victory, the Nepali Congress Party government sought to liberal- 
ize society through a democratic process. The palace coup of 1960 
led to the imprisonment of the powerful Nepali Congress Party 
leader, B.P. Koirala, and other party stalwarts; many other mem- 
bers sought sanctuary in exile in India. 

Although political parties were prohibited from 1960 to 1963 and 
continued to be outlawed during the panchayat system under the 
aegis of the Associations and Organizations (Control) Act of 1963, 
the Nepali Congress Party persisted. The party placed great em- 
phasis on eliminating the feudal economy and building a basis for 
socioeconomic development. It proposed nationalizing basic indus- 
tries and instituting progressive taxes on land, urban housing, sal- 
aries, profits, and foreign investments. While in exile, the Nepali 
Congress Party served as the nucleus around which other opposi- 
tion groups clustered and even instigated popular uprisings in the 
Hill and Tarai regions. During this time, the Nepali Congress Party 
refused the overtures of a radical faction of the Communist Party 
of Nepal for a tactical alliance. 

Although the Nepali Congress Party demonstrated its ability to 



166 



Basantapur Square, close to Kathmandu 's Durbar Square, site of the former 
royal palace, now a bustling venue for souvenir sellers and other vendors 

Courtesy Harvey Follender 

endure, it was weakened over time by defection, factionalism, and 
external pressures. Nevertheless, it continued to be the only or- 
ganized party to press for democratization. In the 1980 referen- 
dum, it supported the multiparty option in opposition to the 
panchayat system. In 1981 the party boycotted the Rashtriya Pan- 
chayat elections and rejected the new government. The death in 
1982 of B.P. Koirala, who had consistendy advocated constitutional 
reforms and a broad-based policy of national reconciliation, fur- 
ther weakened the party. 

In the 1980s, the Nepali Congress Party abandoned its socialis- 
tic economic program in favor of a mixed economy, privatization, 
and a market economy in certain sectors. Its foreign policy orien- 
tation was to nonalignment and good relations with India. Although 
the party also boycotted the 1986 elections to the Rashtriya Pan- 
chayat, its members were allowed to run in the 1987 local elec- 
tions. In defiance of the ban on demonstrations, the Nepali Congress 
Party organized mass rallies in January 1990 that ultimately trig- 
gered the prodemocracy movement. 

Following the humiliating defeat of party leader K.P. Bhattarai 
by the communist factions in the 1991 parliamentary elections, Giri- 
ja Prasad (G.P.) Koirala was chosen by the Nepali Congress Party 



167 



Nepal and Bhutan: Country Studies 

as leader of its Parliamentary Board. As prime minister, he formed 
the first elected democratic government in Nepal in thirty- two years. 
G.P. Koirala was the third of the Koirala brothers to become prime 
minister. Along with his elder brother, B.P. Koirala, he was ar- 
rested in 1960 and was not released until 1967. After a period of 
exile that began in 1971, he returned to Nepal in 1979 under a 
general amnesty. He was elected general secretary of the party in 
1976 in a convention at Patna and played a key role in the 
prodemocracy movement. G.P. Koirala was known for favoring 
reconciliation with the left, but he also wanted to pursue national 
unity and Western-style democracy. 

The Communist Parties 

Like the Nepali Congress Party, the fractured communist move- 
ment was deeply indebted to its Indian counterpart, whose initia- 
tive had helped to found the Communist Party of Nepal (Marxist) 
in 1949 in Calcutta. Nepalese communists looked askance at the 
Nepali Congress Party leadership as willing collaborators of Indi- 
an expansionism and called for broad-based alliances of all progres- 
sive forces for the establishment of a people's democracy. 

As many as seventeen factions, ranging from the quasi-establish- 
ment royal communists to extremely radical fringe groups, vied for 
leadership and control, preventing the movement from making sig- 
nificant gains. The proscription of political parties in 1960 affected 
the communists less severely than other parties because communist 
factions proved better at organizing and operating underground 
and at making the transition to covert activity. Little effort was ex- 
erted to detain communist leaders, and in the months following 
the palace coup d'etat in 1960, the Communist Party of Nepal 
(Marxist) was allowed to operate with a perceptibly greater amount 
of freedom than any other party. The Communist Party of Nepal 
(Marxist-Leninist) was established in 1978, one of many splinter 
groups under the name Communist Party of Nepal. In spite of 
many vicissitudes encountered since the movement's inception, the 
communists maintained national attention because of continued 
support from the peasant and worker organizations and the fact 
that the country's poverty and deprivation offered a fertile ground 
for Marxist ideals. Support was maintained through the All Peasants 
Union and the Nepal Trade Union Congress. 

Communist groups wielded significant influence in the univer- 
sities and professional groups. The movement had a dedicated cadre 
of motivated youth who followed party discipline strictiy. Whereas 
the Nepali Congress Party seemed to accommodate the old guard at 
the expense of the younger generation, communists more ardently 



168 



Flags of the Communist 
Party of Nepal and the 
Nepali Congress Party fly 
over a small urban shrine 
near the center 
of Kathmandu. 
Courtesy 
John N Gunning 



sought younger members. Most of the mainstream communist 
groups in the 1980s believed in democracy and a multiparty sys- 
tem, recognized no international communist headquarters or lead- 
ers, and abjured the Maoism many had embraced earlier. 

The United Left Front coalition, organized in late 1989, sup- 
ported multiparty democracy. During the prodemocracy move- 
ment, it played a crucial role by joining the interim government 
led by the Nepali Congress Party and by submerging serious differ- 
ences of opinion. Although differences in the communist camp were 
endemic when the movement was underground, the internal con- 
flicts lessened as communists operated openly and began to look 
toward future electoral gains. 

The success of the communist parties in the May 12, 1991 , elec- 
tion came as a shock to the Nepali Congress Party, which had failed 
to repeat its 1959 landslide victory. Although there was some uni- 
ty among the communist factions of the United Left Front, there 
was no agreement to share seats with the other factions or groups. 
The Communist Party of Nepal (United Marxist-Leninist) 
faction — formed as a result of a merger between the Communist 
Party of Nepal (Marxist) and the Communist Party of Nepal 
(Marxist-Leninist) — came in second to the Nepali Congress Party. 
The head of the communist leadership echelon was Madan Bhan- 
dari, son of a Brahman priest, who was working to turn his Com- 
munist Party of Nepal (United Marxist-Leninist) into a formidable 



169 



Nepal and Bhutan: Country Studies 

political power. He stunned the Nepali Congress Party in the 1991 
elections by narrowly defeating its leader, K.P. Bhattarai, for a 
parliamentary seat in Kathmandu. 

As a partner in the interim coalition government, the Communist 
Party of Nepal (United Marxist-Leninist) had endorsed, although 
reluctantly, the new constitution, which retained the monarchy. 
The communists received popular support for their allegations that 
the Nepali Congress Party was too close to India and was a threat 
to Nepal's sovereignty. Other mainstream communist leaders were 
Man Mohan Adhikari and Sahana Pradhan, both originally of the 
Communist Party of Nepal (Marxist); and Bishnu Bahadur 
Manandhar of the Communist Party of Nepal (Manandhar), 
another communist faction. 

Other Political Parties 

There was a phenomenal rise in the number of political parties — 
particularly between May and September 1990 — as strategic 
maneuvers to participate in parliamentary elections and find a niche 
in postelection Nepal occurred. The Nepal Sadbhavana Party (Good 
Will Party), one of several regional and ethnic parties, was found- 
ed in April 1990. It aimed at promoting the interests of the Tarai 
Region, including the expulsion of the Hill people from Tarai and 
the establishment of a special relationship with India in the frame- 
work of nonalignment. A forum for people of Indian descent, the 
party also favored the introduction of Hindi as the second national 
language. Its ideology supported a democratic socialist society. 
Other Tarai Region parties included the Nepal Tarai Unity Fo- 
rum, the Nepal Tarai Association, and the Nepal Tarai Muslim 
Congress Party. 

Among the several ethnic parties were the National People's 
Liberation Front (Nepal Rashtriya Jana Mukti Morcha), the Na- 
tional Mongol Organization (Rashtriya Mongol Sanghatan), 
SETAMAGURALI (an acronym of names of different ethnic 
groups of eastern Nepal including the Tamang, Magar, and 
Gurung), the Front of the Kirat Aborigines (Nepal Kirat Adhiba- 
si Janajiti Morch), the Freedom Front of the Limbu People (Lim- 
buwan Mukli Morcha), and the Nepal Nationalist Gorkha Parishad, 
or Parishad (Nepal Rashtrabadi Gorkha Parishad). The Parishad, 
revived in September 1990, was founded in 1951 as part of Rana 
revivalist politics and had placed second in the 1959 general elec- 
tions. Some of its senior leaders later joined the Nepali Congress 
or pancha camps. 

Of those groups favoring the monarchy, two conservative par- 
ties received considerable attention. Hastily founded by two former 



170 



Nepal: Government and Politics 



prime ministers, both parties were called the National Democratic 
Party — suffixed with the names Thapa or Chand enclosed within 
brackets. Other parties of this political bent included the National 
Democratic Unity Panchayat Party (Rashtriya Prajatantrik Ekata 
Panchayat Party), Nepal Welfare Party (Nepal Janahit Party), United 
Democratic Party (Samyukti Prajatantra Party), and Nepal Pan- 
chayat Council (Nepal Panchayat Parishad). 

Besides the Nepali Congress Party, fifteen centrist parties also 
had emerged. Most of these parties were founded by former mem- 
bers of the Nepali Congress Party and defecting pancha who had 
shifted allegiance to the multiparty system. The Women's 
Democratic Party aimed at promoting the rights, interests, and free- 
doms of Nepalese women. 

Elections 

The 1981 Elections 

Growing political unrest, accompanied by massive demonstra- 
tions, forced King Birendra, as a palliative tactic, to call for a na- 
tionwide referendum to choose the form of government. Following 
the May 2, 1980, referendum — the subject of charges of rigging — 
the panchayat system was reaffirmed. However, members of the 
Rashtriya Panchayat would henceforth be elected directly by the 
people on the basis of universal adult suffrage. 

In May 1981 , the king promulgated the third amendment to the 
1962 constitution incorporating the results of the referendum. There 
was no change in the fundamental principle of partylessness; all 
candidates for the Rashtriya Panchayat competed as individuals. 

The first direct election to the Rashtriya Panchayat was held in 
May 1981 . In the midst of an election boycott by the Nepali Con- 
gress Party and other banned political parties, the exercise only 
legitimized the administration of Prime Minister Thapa as a 
democratically elected popular government. Indirectly, however, 
the election was counterproductive because it intensified further 
the increasingly sharp divisions within the various panchayat and 
the continued opposition of the Nepali Congress Party, various com- 
munist factions, and peasants' and workers' organizations. 

There were 1,096 candidates contesting 112 seats in the 1981 
elections. Campaign appeals were made on regional, ethnic, and 
caste lines rather than on broad national issues. Among the con- 
testants were forty-five candidates from pro-Moscow communist 
factions, thirty-six candidates from the Nepali Congress Party, and 
several multiparty pancha. Voter turnout was 63 percent. Despite 



171 



Nepal and Bhutan: Country Studies 

Thapa's reelection, more than 70 percent of the official candidates 
were defeated. Candidates who supported the multiparty system also 
fared poorly. The election of fifty-nine new members in the Rashtriya 
Panchayat indicated the voters' rejection of the old guard. The in- 
direct participation of the political parties was a symbolic gesture 
toward national consensus and reconciliation; the chief protagonist 
was the moderate Nepali Congress Party leader, B.P. Koirala. 

In the tradition of panchayat political patterns of instability, the 
quick fix of a referendum and new elections failed to restore polit- 
ical equilibrium to the system. Corruption and general adminis- 
trative inertia further vitiated the political climate. Even senior 
panchayat leaders, who were openly critical of the system, became 
willing participants in intrigues, which only precipitated counter- 
plots by paranoid palace advisers. Clashes between students, which 
were at times supported by faculty members, created disturbances 
throughout the country. 

The 1986 Elections 

Between the 1981 and 1986 elections, there was a growing rift 
among the pancha. Without a viable economic and political pro- 
gram, disillusionment with the panchayat system increased. In the 
face of a deteriorating economy, faltering development plans, and 
the failure of the panchayati raj to inspire motivation and confidence 
in an already demoralized bureaucracy, the credibility of the govern- 
ment waned. The banned political parties, especially the Nepali 
Congress Party, after initial efforts at reconciliation, concentrated 
on organizational work and the demand for political pluralism. Most 
political activities, however, were noticeable only within the pan- 
chayat system itself. Appointed in 1983, the new prime minister, 
Lokendra Bahadur Chand, had a no-confidence motion filed against 
him immediately after taking office. The motion was declared in- 
admissible on the grounds of errors in drafting, but this power strug- 
gle among different groups of pancha further undermined the 
panchayat system. 

The uneasy political stalemate was upset when in late May 1985, 
the Nepali Congress Party, in preparation for the 1986 election, 
decided to launch a satyagraha (civil disobedience) campaign — in 
which many communists also participated — to demand reforms in 
the political system. A large number of Nepali Congress Party ac- 
tivists were quickly arrested. Although the campaign generally 
lacked popular support, it received considerable attention and in- 
terest among intellectuals and students, caused tension within the 
government, and further divided the already fractured panchayat. 
Kathmandu also was subjected to violence, including explosions 



172 



Nepal: Government and Politics 



that rocked the royal palace and other key buildings. There was 
further discontent when, at the panchayat workers' annual congress, 
the moot issue of government accountability to the legislature was 
disallowed from discussion. 

In a politically charged atmosphere, the second quinquennial 
nationwide election to the Rashtriya Panchayat was held in May 
1986. Slightly more than 9 million voters cast their ballots for 1 ,584 
candidates for 112 seats. According to official sources, 60 percent 
of all eligible voters participated in the election. 

The election was marked by a lack of enthusiasm, which partly 
reflected the Nepali Congress Party's boycott. A few communist 
factions contested the election. About 20 percent of the candidates 
were elected either on the basis of their roles as champions of the 
opposition or for their stand against the elite. Allegations of elec- 
toral malpractice also were widely voiced. The electoral success of 
forty-five Chettris and Thakuris, sixteen Hill Brahmans, and seven 
Newars indicated that the traditional power structure remained 
largely unaffected. Marich Man Singh Shrestha, a Newar, was ap- 
pointed prime minister. Three women were elected to the Rashtriya 
Panchayat from the Tarai Region, but no Muslims were elected. 

Local Elections in 1987 

In contrast to the procedure followed in the 1986 elections, the 
Nepali Congress Party and a number of communist factions al- 
lowed their members to participate as individuals in the 1987 local 
elections. The Nepali Congress Party also made it clear that its 
local election strategy did not mean an end to its opposition or 
resistance to the panchayat system. In urban areas, especially in the 
Tarai Region, certain party members, as well as some communists, 
did very well and were returned to office in substantial numbers. 

The 1991 Elections 

For many Nepalese, participation in the democratic process 
meant either walking for hours along mountain paths or riding a 
yak to cast a ballot. Since most voters were illiterate, they had to 
choose a candidate according to the party's symbol as authorized 
by the election commission; for example, a tree signified the Nepali 
Congress Party and a sun represented the Communist Party of 
Nepal (United Marxist-Leninist). 

Although forty-four parties were recognized by the Election Com- 
mission, only twenty parties actually contested the elections. The 
twenty parties ranged across the political spectrum from radical 
right to loyalist leftist and all except a leftwing radical faction, Masai 
(Torch), eagerly participated in the elections. Twelve parties did 



173 



Nepal and Bhutan: Country Studies 

not win a single seat and obtained a total of only about 82,500 votes, 
slightly more than 1 percent of the total valid votes. Many voters 
seemed to have fallen back on their age-old identification with caste 
or ethnic community. Younger voters favored the progressive leftist 
parties, as did voters in the urban areas. 

The Nepali Congress Party won the first multiparty election in 
thirty-two years, taking 110 seats in the 205-member House of 
Representatives. The results of the elections, however, demonstrat- 
ed that a coalition of various communist parties was a major polit- 
ical force in Nepalese politics, defying the international trend of 
dismanding communist parties and regimes. The Communist Party 
of Nepal (United Marxist-Leninist), a constituent of the United 
Left Front, won sixty-nine seats. The three other communist par- 
ties of the United Left Front coalition won a total of thirteen seats. 
Besides the Nepali Congress Party and the Communist Party of 
Nepal (United Marxist- Leninist) alliance, four other parties quali- 
fied for national party status, which meant they polled more than 
3 percent of the total votes cast. 

The election was marked by heavy voter turnout. Of a total of 
more than 11 million voters, about 7 million, or 65 percent, cast 
ballots, of which slightly more than 4 percent were declared in- 
valid on technical grounds. The election results made it very clear 
that the promonarchists and those in favor of the panchayat sys- 
tem lacked national support. Communist parties won in the Kath- 
mandu Valley and some parts of the eastern Tarai Region. The 
Nepali Congress Party won in other parts of the Tarai Region and 
in western Nepal. The National Democratic Party (Chand) won 
three seats, and the National Democratic Party (Thapa) won only 
one seat. The four members of those parties, six Nepal Sadbhavana 
Party members, and independents were expected to join the moder- 
ate Nepali Congress Party. All leftist elements under the Com- 
munist Party of Nepal (United Marxist- Leninist) umbrella were 
likely to form a solid opposition in Parliament to the Nepali Con- 
gress Party government. 

The new House of Representatives included thirteen members 
of the dissolved Rashtriya Panchayat, five Muslims, seven wom- 
en, and six members of the Parliament that had been dissolved 
in 1960. Although the number of women representatives was much 
lower than was hoped for, Muslim representation was compara- 
ble to their proportion of the population. Also notable was the per- 
formance of the ethnic or regional parties, in particular the 
Tarai-based Nepal Sadbhavana Party, which polled 4 percent of 
the valid votes, allowing it to claim the status of a national party. 
Out of the five seats in Kathmandu, the Nepali Congress Party 



174 



Election Commission building in Kathmandu, formerly a Russian hotel 

Courtesy Janet MacDonald 

won one seat; the rest were swept by the Communist Party of Nepal 
(United Marxist-Leninist). The average age of the newly elected 
members of the House of Representatives was forty-three. 

Kathmandu citizens made it clear that they had enough of po- 
litical dynasties. The son and wife of Nepali Congress Party figure- 
head Ganesh Man Singh ran for two of the high-profile seats; both 
were defeated by communist candidates. In the prestigious con- 
test for a seat in Kathmandu, the Communist Party of Nepal (Unit- 
ed Marxist-Leninist) general secretary, Madan Bhandari, defeated 
interim Prime Minister K.P. Bhattarai. The poor showing of the 
Nepali Congress Party in the urban areas may also be attributed 
to the fact that, given that the communists had been banned for 
thirty years, the party did not see them as potential opposition and 
was overconfident. 

The continuing transition from a partyless panchayat system to 
a multiparty democracy was relatively peaceful, although there were 
some incidents of sporadic violence. Six deaths in preelection vio- 
lence were reported, but no election-related deaths were confirmed 
on polling day. Police enforced a curfew during the long wait for 
election results. Because of election irregularities and violence, the 
Election Commission — which enjoyed the confidence of all the 



175 



Nepal and Bhutan: Country Studies 

parties — ordered repolling at 44 of 8,225 polling centers, affecting 
31 constituencies. 

In response to the interim government's invitation to interna- 
tional observers, a host of Asians, Europeans, and North Ameri- 
cans journeyed to Kathmandu. Among the observers was a 
sixty-four member international observation delegation, represent- 
ing twenty- two countries, which was organized by Nepal's National 
Election Observation Committee. The committee was an offshoot 
of Nepal's Forum for the Protection of Human Rights. The inter- 
national delegation concluded that the elections generally were con- 
ducted in a fair, free, and open manner and that the parties were 
able to campaign unimpaired. Complaints were received that equal 
and adequate access to radio and television was denied, however, 
and that the code of conduct and campaign spending limitations 
were violated. The delegation also recognized that, as confirmed 
by the Election Commission, from 5 to 10 percent of eligible voters 
were not registered and that there were some inaccuracies in voter 
lists. 

On May 29, 1991, a Nepali Congress Party government was 
installed with G.P. Koirala as prime minister. The first session of 
Parliament was held on June 20. The new government faced two 
enormous tasks, both of which concerned India: the negotiation 
of a new trade and transit treaty, and the exploitation of Nepal's 
only major natural resource, water, for hydroelectric power for pur- 
chase by India. Further, although the Communist Party of Nepal 
(United Marxist-Leninist) faction wanted to end recruitment of 
the Gurkhas into the British and Indian armies, the Nepali Con- 
gress Party wanted neither to outrage the Gurkhas nor to deprive 
the country of the foreign remittances sent by the soldiers (see Gur- 
khas Serving Abroad, ch. 5). 

The Media 

Previous constitutions guaranteed freedom of expression as a ba- 
sic right, but in practice this right was severely curtailed. Prepub- 
lication censorship, cancellation of registration for publication, and 
other similar restrictive regulations severely handicapped the free- 
dom of the press, and journalists operated under constant threats 
of harassment and imprisonment. In 1960 the king decreed that 
all newspapers were required to obtain official clearance for reports 
of political activities. In 1962 a government-controlled news agen- 
cy, Rashtriya Sambad Samity, was established to collect and dis- 
tribute news about and within the country. The Samity monopoly 
continued until the success of the prodemocracy movement. In ad- 
dition, provisions of the Freedom of Speech Publications Act of 



176 



Nepal: Government and Politics 



1980 limited the publication of materials that might undermine the 
interests of sovereignty of the nation; contravene principles that 
underlie the constitution; or encourage, abet, or propagate party 
politics. This act was repealed in July 1990. 

The constitution guarantees the freedom of the press as a fun- 
damental right. It also prohibits the censoring of news items, arti- 
cles, or any other reading materials and states that a press cannot 
be closed or seized for printing any news item, article, or any other 
reading materials. In addition, the registration of a newspaper or 
periodical cannot be cancelled for publishing offensive news arti- 
cles or reading material. The operation of a free press is circum- 
scribed, however, by vague restrictions against undermining the 
sovereignty and integrity of Nepal; disturbing the harmonious re- 
lations among the people of different castes, classes, or communi- 
ties; violating decent public behavior morality; instigating crimes; 
or committing sedition or contempt of court. During the 1980s, 
several journalists were incarcerated and held without trial under 
the Public Security Act and the Treason Act. 

The Nepalese press was supportive of the prodemocracy move- 
ment. When the government repressed the movement, the Cen- 
tral Committee of the Nepal Journalists Association, headed by 
Govinda Binyogi, issued a statement that declared all censorship, 
banning of newspapers, and arrests of journalists as illegal, un- 
constitutional, and undemocratic. The Nepal Journalists Associa- 
tion reported that between January and April 1990, forty journalists 
were arrested for comments criticizing the government. During the 
same period, several newspapers halted publication to protest the 
government's attempts at precensorship. More than ten papers had 
entire issues seized by government authorities when they ran arti- 
cles considered overtly critical. Several newspapers were severely 
pressed financially after successive government seizures. 

Since the momentous political changes of April 1990, freedom 
of the press has come into question only once, in November 1990, 
when authorities charged two reporters with slandering the royal 
family in print. Charges were dismissed in December following pro- 
tests by the Nepal Journalist Association to the prime minister. 
An editor also was detained overnight in November 1990 for pub- 
lishing insulting remarks against the queen, but charges were not 
pressed. As of mid- 1991, there were no reports of the seizing or 
banning of foreign publications deemed to have carried articles un- 
favorable to the government or the monarchy. 

In 1991 there were approximately 400 Nepalese newspapers and 
periodicals, including a dozen national dailies with a combined circu- 
lation of more than 125,000. The circulation of other newspapers, 



177 



Nepal and Bhutan: Country Studies 

journals, and magazines was limited to only a few hundred copies 
each. 

Except for two English dailies, Rising Nepal and Commoner, both 
published in Kathmandu, other widely circulating newspapers were 
published in Nepali. These included Gorkhapatra, Samichhya, Matri- 
bhumi, Rostra Pukar, Daily News, Samaya, and Janadoot. The num- 
ber of publications in Hindi and Newari, however, was increasing 
in the late 1980s. 

The daily Gorkhapatra and Rising Nepal were government organs. 
Before the success of the prodemocracy movement, both govern- 
ment dailies primarily provided coverage of official views, carried 
virtually no information on opposition activities, and muted criti- 
cism of the government. Nepal Raj Patra, the principal government 
publication since 1951, contained texts of laws, decrees, procla- 
mations, and royal orders and was available in both English and 
Nepali. 

Because of the government's near monopoly on domestic news, 
many newspaper readers relied on foreign publications. They re- 
lied on as Statesman, Times of India, and Hindustan Times — all from 
India — and the Pacific editions of Time, Newsweek, and China To- 
day, published in India in Hindi, English, and Nepali. 

Much of the fast proliferating printed matter was read only by 
a small elite and by government functionaries in the Kathmandu 
Valley. Staggeringly widespread illiteracy (about 33 percent of the 
population were literate in 1990), lack of a transport infrastruc- 
ture, the general apathy of the rural people toward the affairs of 
Kathmandu — to which the press devoted a major share of 
coverage — and a general reliance on oral transmission of informa- 
tion rather than on the written word were among the factors that 
impeded the dissemination of publications. By April 1990, however, 
news coverage had broadened to reflect a wide range of views. 
Although in most circumstances editorial views reflected govern- 
ment policy, editors did at times exercise the right to publish criti- 
cal views and alternative policies. 

Electronic media consisted of radio and television programming 
controlled by the government. Radio Nepal broadcast on short- 
wave and medium-wave both in Nepali and English from trans- 
mitters in Jawalakhel and Khumaltar (see Communications, ch. 
3). Nepal Television Corporation broadcast twenty-three hours of 
programs per week from its station at Singha Durbar, Kathman- 
du. Transmitters also were located at Pokhara, Biratnagar, and 
Hetauda. Prior to the unrest of 1990, programming closely reflected 
the views of the government. Although coverage of government 
criticism remained inadequate, programming in 1991 reflected a 



178 



Nepal: Government and Politics 



broader range of interests and political views. The Voice of Ameri- 
ca, the British Broadcasting Corporation, and several other Euro- 
pean and Asian networks were monitored in Nepal. 

Foreign Policy 

A landlocked country, Nepal is sandwiched between two giant 
neighbors — China and India (see fig. 1; The Land, ch. 2). To the 
north, the Himalayas constitute a natural and mostly impassible 
frontier, and beyond that is the border with China. To the south, 
east, and west, Nepal is hemmed in by India. Without an outlet 
to the sea, Nepal has been dependent on India for international 
trade and transit facilities. 

During the British Raj (1858-1947), Nepal sought geostrategic 
isolation. This traditional isolationism partially was the product 
of the relative freedom the country enjoyed from external inter- 
vention and domination. From the mid-nineteenth century, when 
Britain emerged as the unchallenged power in India and the Qing 
Dynasty (1644-1911) in China was in decline, Nepal made accom- 
modations with Britain on the best possible terms. Without sur- 
rendering autonomy on internal matters, Nepal received guarantees 
of protection from Britain against external aggression and inter- 
ference (see Rana Rule, ch. 1). London also considered a steady 
flow of Gurkha recruits from Nepal as vital to support Britain's 
security in India and its other colonial territories. 

In the 1950s, Nepal began a gradual opening up and a commit- 
ment to a policy of neutrality and nonalignment. At the 1973 sum- 
mit of the Nonaligned Movement in Algiers, King Birendra 
proposed that "Nepal, situated between two of the most populous 
countries of the world, wishes her frontiers to be declared a zone 
of peace." In Birendra's 1975 coronation address, he formally asked 
other countries to endorse his proposal. Since then, the concept 
of Nepal as a zone of peace has become a main theme of Kath- 
mandu's foreign policy. 

As of mid- 1991, Nepal had been endorsed as a zone of peace 
by more than 110 nations. Many of these countries also recom- 
mended a regional approach to peace as the goal. Without the en- 
dorsement of India and the former Soviet Union, however, the 
prospect of broader international acceptance was dim. 

At the beginning of the 1990s, Nepal had established diplomatic 
relations with approximately 100 countries. Nepal was an active 
member of the United Nations (UN) and participated in a num- 
ber of its specialized agencies. Nepal also was a founding member 
of the South Asian Association for Regional Cooperation (SAARC) 
and had successfully negotiated several bilateral and multilateral 



179 



Nepal and Bhutan: Country Studies 

economic, cultural, and technical assistance programs. Because of 
its geographical proximity to and historical links with China and 
India, Nepal's foreign policy was focused mainly on maintaining 
close and friendly relations with these two countries and on safe- 
guarding its national security and independence. Nepal's relations 
with the United States, Europe, and the Soviet Union showed new 
signs of vitality in 1991. 

Relations with India 

Even after India had achieved independence from Britain in 1947, 
Nepalese-Indian relations continued to be based on the second 
Treaty of Sagauli, which had been signed with the government of 
British India in 1925. Beginning in 1950, however, relations were 
based on two treaties. Under the Treaty of Peace and Friendship, 
ratified in July 1950, each government agreed to acknowledge and 
respect the other's sovereignty, territorial integrity, and indepen- 
dence; to continue diplomatic relations; and, on matters pertain- 
ing to industrial and economic development, to grant rights equal 
to those of its own citizens to the nationals of the other residing 
in its territory. Agreements on all subjects in this treaty superseded 
those on similar matters dealt with in the previous treaties between 
Nepal and Britain. In the Treaty of Trade and Commerce, rati- 
fied in October 1950, India recognized Nepal's right to import and 
export commodities through Indian territory and ports. Customs 
could not be levied on commodities in transit through India. 

India's influence over Nepal increased throughout the 1950s. 
The Citizenship Act of 1952 allowed Indians to immigrate to Nepal 
and acquire Nepalese citizenship with ease — a source of some resent- 
ment in Nepal. And, Nepalese were allowed to migrate freely to 
India — a source of resentment there. (This policy was not changed 
until 1962 when several restrictive clauses were added to the Nepa- 
lese constitution.) Also in 1952, an Indian military mission was 
established in Nepal. In 1954 a memorandum provided for the joint 
coordination of foreign policy, and Indian security posts were es- 
tablished in Nepal's northern frontier (see India, ch. 5). At the 
same time, Nepal's dissatisfaction with India's growing influence 
began to emerge, and overtures to China were initiated as a coun- 
terweight to India. 

King Mahendra continued to pursue a nonaligned policy be- 
gun during the reign of Prithvi Narayan Shah in the mid-eighteenth 
century (see The Expansion of Gorkha, ch. 1). In the late 1950s 
and 1960s, Nepal voted differently from India in the UN unless 
India's basic interests were involved. The two countries consistently 



180 



Nepal: Government and Politics 

remained at odds over the rights of landlocked states to transit fa- 
cilities and access to the sea. 

Following the 1962 Sino-Indian border war, the relationship be- 
tween Kathmandu and New Delhi thawed significantly. India sus- 
pended its support to India-based Nepalese opposition forces. Nepal 
extracted several concessions, including transit rights with other 
countries through India and access to Indian markets (see Foreign 
Trade, ch. 3). In exchange, through a secret accord concluded in 
1965, similar to an arrangement that had been suspended in 1963, 
India won a monopoly on arms sales to Nepal. 

In 1969 relations again became stressful as Nepal challenged the 
existing mutual security arrangement and asked that the Indian 
security checkposts and liaison group be withdrawn. Resentment 
also was expressed against the Treaty of Peace and Friendship of 
1950. India grudgingly withdrew its military checkposts and liai- 
son group, although the treaty was not abrogated. 

Further changes in Nepalese-Indian relations occurred in the 
1970s. India's credibility as a regional power was increased — and 
Nepal's vulnerability was reinforced — by the 1971 Indo-Soviet 
Treaty of Peace, Friendship, and Cooperation; the 1971 Indo- 
Pakistani War, which led to the emergence of an independent 
Bangladesh; the absorption of Sikkim into India in 1974; increased 
unofficial support of the Nepali Congress Party leadership in India; 
rebellions fomented by pro-Beijing Naxalite elements in 1973-74 
in West Bengal State bordering Nepal; and India's nuclear explo- 
sion in 1974. Nepal adopted a cautious policy of appeasement of 
India, and in his 1975 coronation address King Birendra called 
for the recognition of Nepal as a zone of peace where military com- 
petition would be off-limits. India showed some flexibility in placat- 
ing Nepal by distancing, if not disassociating, itself from the 
Nepalese opposition forces based in India, agreeing to a favorable 
trade and transit arrangement in 1978, and entering into another 
agreement on joint industrial ventures between Indian and Nepa- 
lese firms. The latter agreement, by opening the possibilities of In- 
dia's investment, indirectly furthered India's domination of Nepal's 
economy. India also continued to maintain a high level of economic 
assistance to Nepal. 

In the mid-1970s, Nepal pressed for substantial amendments to 
the 1971 trade and transit treaty, which was due to expire in 1976. 
India ultimately backed down from its initial position to terminate 
the 1971 treaty even before a new treaty could be negotiated. The 
1978 agreements incorporated Nepal's demand for separate treaties 
for trade and transit. The relationship between the two nations im- 
proved over the next decade, but not steadily. 



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Nepal and Bhutan: Country Studies 

India continued to support the Nepalese opposition and refused 
to endorse Nepal as a zone of peace. In 1987 India urged expul- 
sion of Nepalese settlers from neighboring Indian states, and Nepal 
retaliated by introducing a work permit system for Indians work- 
ing in Nepal. That same year, the two countries signed an agree- 
ment setting up a joint commission to increase economic cooperation 
in trade and transit, industry, and water resources. 

Relations between the two countries sank to a low point in 1988 
when Kathmandu signed an agreement with Beijing to purchase 
weapons soon after a report that China had won a contract for con- 
structing a road in the western sector to connect China with Nepal 
(see China, ch. 5). India perceived these developments as deliber- 
ately jeopardizing its security. India also was annoyed with the high 
volume of unauthorized trade across the Nepalese border, the is- 
suance of work permits to the estimated 150,000 Indians residing 
in Nepal, and the imposition of a 55 percent tariff on Indian goods 
entering Nepal. 

In retaliation for these developments, India put Nepal under a 
virtual trade siege. In March 1989, upon the expiration of the 1978 
treaties on trade and transit rights, India insisted on negotiating 
a single unified treaty in addition to an agreement on unautho- 
rized trade, which Nepal saw as a flagrant attempt to strangle its 
economy. On March 23, 1989, India declared that both treaties 
had expired and closed all but two border entry points. 

The economic consequences of the trade and transit deadlock 
were enormous. Shortages of Indian imports such as fuel, salt, cook- 
ing oil, food, and other essential commodities soon occurred. The 
lucrative tourist industry went into recession. Nepal also claimed 
that the blockade caused ecological havoc since people were com- 
pelled to use already dwindling forest resources for energy in lieu 
of gasoline and kerosene, which came mostly via India (see Ener- 
gy, ch. 3). To withstand the renewed Indian pressure, Nepal under- 
took a major diplomatic initiative to present its case on trade and 
transit matters to the world community. 

The relationship with India was further strained in 1989 when 
Nepal decoupled its rupee (see Glossary) from the Indian rupee, 
which previously had circulated freely in Nepal. India retaliated 
by denying port facilities in Calcutta to Nepal, thereby prevent- 
ing delivery of oil supplies from Singapore and other sources. 

A swift turn in relations followed the success of the Movement 
for the Restoration of Democracy in early 1990. In June 1990, a 
joint Kathmandu-New Delhi communique was issued pending the 
fmalization of a comprehensive arrangement covering all aspects 
of bilateral relations, restoring trade relations, reopening transit 



182 



Nepal: Government and Politics 



routes for Nepal's imports, and formalizing respect of each other's 
security concerns. Essentially, the communique announced the 
restoration of the status quo ante and the reopening of all border 
points, and Nepal agreed to various concessions regarding India's 
commercial privileges. Kathmandu also announced that lower cost 
was the decisive factor in its purchasing arms and personnel carri- 
ers from China and that Nepal was advising China to withhold 
delivery of the last shipment. The communique declared that Kath- 
mandu and New Delhi would cooperate in industrial development, 
in harnessing the waters of their common rivers for mutual benefit, 
and in protecting and managing the environment. 

Relations with Other South Asian Nations 

Pakistan and Bangladesh 

Nepal's relations with other South Asian nations were dominated 
by the search for alternate transit facilities and a reduction of In- 
dia's influence. Nepal tried to stay clear of Indo-Pakistani rivalry, 
inasmuch as Nepal had a only minor role in the Kashmir dispute 
and had no involvement in several United States-sponsored secu- 
rity arrangements in the region in the early 1950s. 

Nepal and Pakistan signed the protocol for establishing full diplo- 
matic relations in 1962 and exchanged ambassadors in 1963. Two 
agreements between Kathmandu and Karachi (then Pakistan's cap- 
ital) were signed in October 1962, calling for reciprocal most- 
favored-nation treatment. A January 1963 agreement provided 
Nepal with free trade and transit facilities through the port of Chit- 
tagong, East Pakistan (present-day Bangladesh). This arrangement 
somewhat reduced Nepal's dependence on India for import 
privileges, particularly after the establishment of an air link with 
East Pakistan later in the year. This endeavor to secure another 
transit route through East Pakistan had at best only limited potential 
because of the intervening Indian territory. 

Nepal initially adopted a neutral posture during the Indo-Pakistan 
war of 1971 but immediately recognized the newly independent 
nation of Bangladesh on January 16, 1972. Two days after diplo- 
matic relations were established with Dhaka, Islamabad broke off 
diplomatic relations with Kathmandu. 

Nepal's focus shifted to Bangladesh as a permanent and much 
desired gateway to the sea. Bangladesh, friendly to India and close 
to Nepal's southern border, opened new potential for both trade 
and transit facilities. 

Nepal's relations with Bangladesh improved when an anti-Indian 
faction seized power in Dhaka in August 1975. The turning point 



183 



Nepal and Bhutan: Country Studies 

in Nepal-Bangladesh relations, however, occurred in April 1976 
when the two countries signed four agreements relating to trade, 
transit, civil aviation, and technical cooperation. They also jointly 
issued a communique on maintaining close cooperation in the fields 
of power generation and the development of water resources. The 
transit agreement exempted all traffic-in-transit from transit duties 
or other charges. Six points of entry and exit for the movement 
of Nepalese traffic-in-transit through Bangladesh's ports and ter- 
ritory were designated. This transit agreement came at a crucial 
time — during Nepal's conclusion of a trade and transit agreement 
with a reluctant India. In 1986 Nepal was also gratified when Ban- 
gladesh wanted to involve Nepal in the issue of distribution and 
utilization of water from the Ganges River. 

Bhutan 

Nepal has shown interest in developing a mutually advantageous 
relationship with Bhutan, but substantial problems have persist- 
ed. Through its own treaty with India, signed in 1949, Bhutan had 
generally followed New Delhi's guidance in foreign policy matters. 
Bhutan had serious reservations over joining in regional and in- 
ternational organizational politics bearing Nepal's initiatives and 
had ignored the concept of a Himalayan federation. Another poten- 
tial source of dissension in Nepalese-Bhutanese relations was the 
presence of a large Nepalese community in southern Bhutan. In 
the early 1990s, the large Nepalese population emerged as a poten- 
tially divisive issue between the two countries. In spite of these 
difficulties, Kathmandu maintained nonresident diplomatic rela- 
tions with Thimpu (see Foreign Relations, ch. 6). 

Sri Lanka and Maldives 

As of mid- 1991 , Nepal had not cultivated bilateral relations with 
Sri Lanka or Maldives. Nevertheless, following a visit to Nepal 
by the Maldives president in May 1981, a cultural exchange and 
economic cooperation agreement was signed. The agreement, 
however, has remained dormant. 

Nepal was interested in Sri Lanka's Tamil separatist movement 
because of its own potential problems with ethnic diversity. In line 
with its policy of deploring the violation of the territorial integrity 
of sovereign states, Nepal also expressed concern at India's mili- 
tary involvement in Sri Lanka during the 1980s. Nepal welcomed 
the conclusion of the Indo-Sri Lankan Accord of July 29, 1987. 

Relations with China 

The keystone of Nepal's China policy was maintaining equal 



184 



Nepal: Government and Politics 



friendships with China and India while simultaneously seeking to 
decrease India's influence in Nepal and Nepal's dependence on 
India. Further, Kathmandu felt that the competition between its 
two giant neighbors — China and India — would benefit its own eco- 
nomic development. 

The first recorded official relations with China and Tibet occurred 
near the middle of the seventh century. By the eighteenth century, 
Nepalese adventurism in Tibet led to Chinese intervention in favor 
of Tibet. The resultant Sino-Nepalese Treaty of 1792 provided for 
tribute-bearing missions from Nepal to China every five years as 
a symbol of Chinese political and cultural supremacy in the region 
(see The Making of Modern Nepal, ch. 1). 

In the Anglo-Nepalese War of 1814-16, China refused Nepal's 
requests for military assistance and, by default, surrendered its 
dominant position in Nepal to the growing British influence. 
However, it appeared to be expedient for Nepal to retain the fic- 
tion of a tributary relationship with China in order to balance China 
against Britain. 

Nepal invaded Tibet in 1854. Hostilities were quickly terminated 
when China intervened, and the Treaty of Thapathali was con- 
cluded in March 1856. The treaty recognized the special status of 
China, and Nepal agreed to assist Tibet in the event of foreign 
aggression. 

Relations between Nepal and China and Tibet continued without 
critical incident until 1904, when British India sent an armed ex- 
pedition to Tibet and Nepal rejected Tibet's request for aid to avoid 
risking its good relations with Britain. Beginning in 1908, Nepal 
stopped paying tribute to China. 

By 1910, apprehensive of British activity in Tibet, China had 
reasserted its claim to sovereign rights in Tibet and feudatory mis- 
sions from Nepal. In 1912 Nepal warned the Chinese representa- 
tive at Lhasa that Nepal would help Tibet attain independent status 
as long as it was consistent with British interests. Nepal broke re- 
lations with China when the Tibetans, taking advantage of the 
Chinese revolution of 1911, drove the Chinese out. 

When the Chinese communists invaded Tibet in 1950, Nepal's 
relations with China began to undergo drastic changes. Although 
annual Tibetan tribute missions appeared regularly in Nepal as 
late as 1953, Beijing had started to ignore the provisions of the 1856 
treaty by curtailing the privileges and rights it accorded to Nepa- 
lese traders, by imposing restrictions on Nepalese pilgrims, and 
by stopping the Tibetan tributary missions. 

The break between Kathmandu and Beijing continued until 1955 
when relations were reestablished with China. The two countries 



185 



Nepal and Bhutan: Country Studies 

established resident ambassadors in their respective capitals in July 
1960. 

In 1956 the Treaty of Thapathali was replaced by a new treaty 
under which Nepal recognized China's sovereignty over Tibet and 
agreed to surrender all privileges and rights granted by the old 
treaty. In 1962 Nepal withdrew its ambassador from Tibet and sub- 
stituted a consul general. An agreement on locating and demar- 
cating the Nepal-Tibet boundary was signed in March 1960. Within 
a month, another Treaty of Peace and Friendship was signed in 
Kathmandu. 

The Sino-Nepal Boundary Treaty was signed in Beijing in Oc- 
tober 1961. The treaty provided for a Sino-Nepal Joint Commis- 
sion to agree on questions regarding alignment, location, and 
maintenance of the seventy-nine demarcation markers. The com- 
mission's findings were attached to the original treaty in a pro- 
tocol signed in January 1963. 

During the Sino-Indian conflict of 1962, Nepal reasserted its neu- 
trality and warned that it would not submit to aggression from any 
state. Although the warning was directed at China, Nepal continued 
to support China's application for membership in the United Na- 
tions. A potential source of irritation in Sino-Nepalese relations 
was relieved in January 1964 when China agreed to release the 
frozen funds of Nepalese traders from Tibetan banks. 

An agreement to construct an all-weather highway linking Kath- 
mandu with Tibet was signed in October 1961 — a time when neither 
Kathmandu nor Beijing had cordial relations with New Delhi. The 
Kathmandu-Kodari road opened in May 1967 but did not yield 
any commercial or trade benefits for Nepal. Because of the severe 
restrictions imposed by Beijing even before the road was opened, 
Kathmandu had closed its trade agencies in Tibet by January 1966. 
Although the highway had no economic or commercial value and 
was not viable as an alternate transit route, it was of strategic mili- 
tary importance to China. The highway established direct links be- 
tween two major Chinese army bases within 100 kilometers of 
Kathmandu to forward bases at Gyirong in Tibet. 

Throughout the latter half of the 1960s, Nepal's relations with 
China remained fairly steady. One exception was the belligerent 
activities of the Chinese officials in Nepal who eulogized and ex- 
tolled the successes of the Cultural Revolution (1966-76) during 
the summer of 1967. 

The emergence of a strident and confident India in the early 1970s 
introduced some new dimensions in Nepal's China policy. King 
Birendra did not abandon the policy of equal friendship between 
China and India but wanted to woo China to counter India's 



186 



United States Agency for International Development mission, located in the 
Rabi Bhavan complex, an old Rana palace in Kalimati Durbar, Kathmandu 

Courtesy John N. Gunning 

growing influence in the region. China had implicitly recognized 
India's predominance in the region, however, and was willing to 
oblige Nepal only to the extent of pledging support in safeguard- 
ing its national independence and preventing foreign interference. 

In an open challenge to India's primacy in Nepal, Nepal negoti- 
ated a deal for the purchase of Chinese weapons in mid- 1988. Ac- 
cording to India, this deal contravened an earlier agreement that 
obliged Nepal to secure all defense supplies from India. 

Nepal's overtures to China also had economic implications. Ever 
since an economic aid agreement between China and Nepal had 
been concluded in 1956, China's steadily increasing economic and 
technical assistance was being used to build up Nepal's industrial 
infrastructure and implement economic planning. According to a 
1990 report, an estimated 750 Chinese workers were in Nepal, most 
of them working on road-building crews and small-scale develop- 
ment projects. The foreign trade balance also was in Nepal's favor. 
China reportedly has ceded some territory to Nepal to facilitate 
boundary demarcation and has endorsed Nepal as a zone of peace. 

Relations with the United States 

Nepal's relations with the United States were cordial. Diplomatic 



187 



Nepal and Bhutan: Country Studies 

relations at the legation level were established in 1947. Commer- 
cial relations were conducted according to the most- favored-nation 
status. In August 1951, the two governments agreed to raise the 
status of their respective diplomatic representations to the rank of 
ambassador. It was not until August 1959, however, that each coun- 
try established a resident embassy in each other's capital. The first 
agreement for United States economic assistance was signed in 
January 1951. By 1990 the United States commitment totaled ap- 
proximately US$475 million. 

In the late 1980s, United States economic assistance channeled 
through the Agency for International Development averaged US$15 
million annually. The United States also contributed to Nepal's 
development through various multilateral institutions, business- 
es, and private voluntary organizations such as CARE, Save the 
Children Federation, United Mission to Nepal, Seventh Day Ad- 
ventists, the Coca-Cola Corporation, and Morrison Knudsen Cor- 
poration. Much of Washington's economic assistance has been in 
the fields of health and family planning, environmental protection, 
and rural development. Projects have included geological surveys, 
road construction, agricultural development, and educational pro- 
grams. The Peace Corps began operating in 1962 in Nepal, and 
in 1991 it was the only such program still operational in South Asia. 
The Peace Corps concentrated on agricultural, health, education, 
and rural development programs. 

United States policy toward Nepal supported three objectives — 
peace and stability in South Asia, Nepal's independence and ter- 
ritorial integrity, and selected programs of economic and techni- 
cal assistance to assist development. At the beginning of the Cold 
War, the United States also had a significant strategic interest in 
the country because Nepal was an outpost and a portal into China. 

Although Kathmandu's primary interest in relations with 
Washington was for economic and technical assistance, Nepal also 
sought global support for its sovereignty and territorial integrity. 
While on a state visit to the United States in December 1983, King 
Birendra received President Ronald Reagan's endorsement of Nepal 
as a zone of peace. 

During Nepal's prodemocracy movement, the United States 
Department of State voiced concern at the violent turn of events 
in February 1990 and urged the government to start a dialogue 
with the democratic forces in order to stop violence and repres- 
sion. Congressman Stephen Solarz, Chairman of the House of 
Representatives Foreign Affairs Subcommittee on Asia and the Pa- 
cific, and his colleagues twice visited Nepal and met with the king 
and a wide range of political leaders undoubtedly to discuss events 



188 



Nepal: Government and Politics 



relating to the prodemocracy movement. The United States-based 
Asia Watch human rights monitoring group published a detailed 
account of torture, repression, and inhumane treatment meted out 
to the detainees. 

Relations with Britain 

Nepalese-British relations spanned more than two centuries and 
generally were friendly and mutually rewarding (see From the 
Anglo-Nepalese War to World War II, ch. 5). Since the Treaty 
of Sagauli of 1816, when Britain began recruiting Gurkha troops, 
the British have had continuous official representation in Kath- 
mandu. In 1855 a convention required the Rana prime ministers 
to seek unofficial British confirmation before assuming the powers 
of their office. The Ranas offered military assistance to the British 
during the Second Sikh War (1848-49), the Sepoy Rebellion of 
1857, World War I (1914-18), and World War II (1939-45). Dur- 
ing the Rana period, Nepal recognized Britain's leadership in for- 
eign relations through numerous treaties and agreements. The 
Treaty of Sagauli was superseded in 1923 by the Treaty of Per- 
petual Peace and Friendship, which reconfirmed Nepal's indepen- 
dent status and remained virtually unchanged until Britain's 
paramountcy over India ended in 1947 and India inherited Brit- 
ain's historic interest in Nepal. Britain endorsed Nepal as a zone 
of peace in 1980. 

A minor irritant in the steady relationship between Kathman- 
du and London was Britain's policy, begun in the late 1980s, of 
gradually phasing out its employment of Gurkha soldiers. Remit- 
tances from the Gurkhas based in Britain and Hong Kong served 
as a stable source of foreign exchange earnings for Nepal. The dis- 
missal in 1988 of more than 100 Gurkha soldiers based in Hong 
Kong caused such a furor in Nepal that the British minister of state 
for army supply visited Kathmandu. The minister stated that the 
incident was atypical and that the 5,000 Gurkhas stationed in Hong 
Kong would be maintained and assigned to Britain, Brunei, and 
elsewhere after 1997 when Hong Kong reverted to China. Britain 
announced in 1989, however, that the strength of the British Brigade 
of Gurkhas would be cut by 50 percent. 

Relations with the Soviet Union 

Relations between Nepal and the Soviet Union were cordial and 
cooperative. Diplomatic relations were established in 1956. In 1959 
embassies were opened in Kathmandu and Moscow. A Soviet eco- 
nomic assistance program that concentrated on the industrial, 
health, and transportation sectors began shortly thereafter. The 



189 



Nepal and Bhutan: Country Studies 

gross impact of Soviet aid, however, was inconsequential, and by 
1990 it had trickled down only to limited training and technical 
assistance. 

In support of India, the Soviet Union has resisted Nepal's repeat- 
ed overtures to endorse it as a zone of peace. During a 1987 visit 
to Kathmandu, however, the Soviet deputy minister of foreign af- 
fairs stated that Moscow respected Nepal's constitution, in which 
the zone of peace concept was entrenched as a foreign policy goal. 

Relations with Other Countries 

Nepal has continually sought to establish good relations and an 
identity with the world community. However, because most coun- 
tries recognized the primacy of India's leadership in the region, 
Nepal's continued efforts to expand its international activities, were 
of little use in solving its problems with India. 

Nepal's contacts with the oil-rich Arab countries had increased 
in the late 1980s. A number of Nepalese citizens worked in several 
Middle Eastern countries, particularly the United Arab Emirates 
and Kuwait, and remittances from Nepalese nationals were a source 
of hard currency. Nepal was one of the first South Asian countries 
to condemn Iraq's aggression and takeover of Kuwait in August 
1990. Kuwait also was an important source of development aid 
to Nepal. 

Of the West European countries, the Federal Republic of Ger- 
many (West Germany) was Nepal's largest donor and, through 
1986, provided more than Rs5.6 billion in economic and techni- 
cal assistance for more than forty different projects ranging from 
health programs to hydroelectricity. France also had a role in as- 
sisting economic development. During the 1990 prodemocracy 
movement, France expressed its readiness to write off all its loans 
to Nepal, amounting to US$25 million, as a gesture of goodwill. 
The Swiss government also indicated its support of the movement 
and that it would probably increase its aid. 

Nepal also sought to improve its international status by emphasiz- 
ing its religious connections. In 1983 Nepal enlisted its support for 
the International Lumbini Development Project to present Lum- 
bini, the birth place of Siddhartha Gautama, the Buddha, as a sym- 
bol of peace. Nepal continued to highlight its role as the only Hindu 
kingdom in the world (as stipulated in the constitution) by period- 
ically convening the World Hindu Meet. Nepal also hosted meet- 
ings of The World Fellowship of Buddhists in Kathmandu. 

International and Regional Organizations 

Since the early 1950s, Nepal has pursued a calculated nonaligned 



190 



Nepal: Government and Politics 



policy and has become an active participant in international or- 
ganizations. Nepal was admitted to the UN in 1955. Prior to its 
admission, Nepal already was a member of several specialized UN 
agencies, such as the Food and Agriculture Organization (1951); 
the United Nations Educational, Scientific, and Cultural Organi- 
zation (1952); the World Health Organization (1953); and the Eco- 
nomic Council for Asia and the Far East (1954). Kathmandu often 
voted with the nonaligned group at the UN. In 1961 Nepal be- 
came a member of the World Bank and the International Mone- 
tary Fund (IMF — see Glossary). Nepal also was a member of the 
Universal Postal Union, the International Civil Aviation Organi- 
zation, the International Committee of the Red Cross, and a host 
of other international organizations. 

As a member of the Group of 77, Nepal was a vociferous cham- 
pion for a new international economic order for the equitable dis- 
tribution of resources and services between the developed countries 
and the developing world. In 1977 Nepal motivated its major for- 
eign aid donors to form an aid-Nepal consortium to improve Nepal's 
ability to coordinate aid projects (see Foreign Aid, ch. 3). 

Kathmandu tended to use its membership in international or- 
ganizations as a forum to articulate its difficulties with New Del- 
hi. For example, Nepal's position on the trade and transit disputes 
was aired at IMF and World Bank meetings. Nevertheless, most 
of the time Nepal voted with India in the UN. In 1987 Nepal en- 
hanced its image in the UN when the General Assembly decided 
to establish a Regional Center for Peace and Disarmament in South 
Asia headquartered at Kathmandu. In June 1988, for the second 
time in twenty years, Nepal was elected to a two-year term as a 
nonpermanent member of the UN Security Council. At the request 
of the UN secretary general, Nepal sent observers and troops to 
supervise the Soviet troop withdrawal from Afghanistan. 

Nepal also participated in various other forums for less-developed 
nations. In February 1985, Nepal hosted the twenty-fourth session 
of the Asian- African Legal Consultative Committee. Nepal par- 
ticipated in the thirtieth anniversary commemoration of the Asian- 
African Conference in Bandung, Indonesia, in 1985 and the ex- 
traordinary meeting of the Coordinating Bureau of the Nonaligned 
Countries on Namibia in New Delhi, at which it reiterated its sup- 
port for the Namibian people. 

In all the nonaligned summits held since 1961 , the Nepalese dele- 
gation has been led by the king. In these summits, Nepal relent- 
lessly has pleaded for the acceptance of peaceful coexistence and 
the right to remain free from military involvement. 



191 



Nepal and Bhutan: Country Studies 

Nepal scored a diplomatic victory in 1986 when, by unanimous 
decision, Kathmandu was chosen as the venue for the permanent 
secretariat of SAARC. In 1987 Nepal organized the first regional 
summit of SAARC in Kathmandu in which King Birendra 
reaffirmed a commitment to peace, stability, and regional cooper- 
ation. The success of this meeting and the conclusion of agreements 
to establish a SAARC food security reserve and to suppress ter- 
rorism enhanced Nepal's prestige. Although bilateral issues were 
not allowed to be raised in SAARC meetings, Nepal used the fo- 
rum to parley with the smaller states of the region on the basis of 
a commonality of fear of Indian preeminence. 

* * * 

Scholarship on contemporary political developments in Nepal 
is limited. Although outdated, Leo E. Rose and John T. Scholz's 
Nepal: Profile of a Himalayan Kingdom; Leo E. Rose and Margaret 
W. Fisher's The Politics of Nepal; Frederick H. Gaige's Regionalism 
and National Unity in Nepal; and Rishikesh Shaha's Nepali Politics 
remain outstanding contributions on the subject. On recent polit- 
ical developments in Nepal, Rishikesh Shaha's Politics in Nepal, 
1980-1990 is an eminently readable account. The chapter on Nepal 
in Craig Baxter et al. 's Government and Politics in South Asia is useful 
in providing a regional perspective. Roop Singh Baraith's Transit 
Politics in South Asia and Parmanand's The Nepali Congress since Its 
Inception are useful collateral works. The Hoover Institution's Year- 
book on International Communist Affairs covers activities of the Nepa- 
lese communists. 

The complete text with amendments of the Nepali constitutions 
can be found in Albert P. Blaustein and Gisbert H. Flanz's Consti- 
tutions of the Countries of the World. Although Nepal's administrative 
structure is in transition, Hem Narayan Agrawal's The Adminis- 
trative System of Nepal and Rishikesh Shaha's Essays in the Practice of 
Government in Nepal are basic resources. On human rights issues, 
Amnesty International's Annual Report and special reports as well 
as Asia Watch's special reports on Nepal are extremely useful. 

There is no comprehensive up-to-date work on Nepal's inter- 
national relations and foreign policy. Leo E. Rose's Nepal: Strategy 
for Survival and S.D. Muni's Foreign Policy of Nepal are notable works. 
Of the several works on bilateral relations, the following are use- 
ful: Ramakant's Nepal-China and India; Shankar Kumar Jha's Indo- 
Nepal Relations ; T.R. Ghoble's China- Nepal Relations and India; and 
Rabindra K. Das's Nepal and Its Neighbors. For reportage on Nepa- 
lese politics and international affairs, weekly reports in the Far Eastern 



192 



Nepal: Government and Politics 



Economic Review and its Asia Yearbook, annual essays on Nepal in 
Asian Survey, and Europa World Year Book are good sources. More 
detailed daily chronicles can be found in the Joint Publications 
Research Service's JPRS Report: Near East and South Asia; and the 
Asian Recorder. (For further information and complete citations, see 
Bibliography.) 



193 



Chapter 5. Nepal: National Security 



World War I vintage kukri, the Gurkha knife, with its distinctive notch 
above the hilt, and two soldiers 



NEPAL IS RENOWNED for its fighting men, the fabled Gur- 
khas. The worldwide reputation of Nepalese soldiers as a superior 
fighting force can be attributed mainly to the qualities of the troops 
of Nepalese origin who have fought as contingents in the British 
Army since the early nineteenth century and for the Indian Army 
since its formation in 1947. With their long record of martial 
prowess and battlefield heroics, the Gurkhas provide one of the 
more colorful chapters of modern military history. 

The history of the Royal Nepal Army is intertwined with that 
of the Rana Dynasty and its Shah predecessors (see Rana Rule, 
ch. 1). In the post- World War II era, the army served as a bastion 
of support for King Mahendra Bir Bikram Shah Dev and his heir, 
King Birendra Bir Bikram Shah Dev, Nepal's reigning monarch 
in late 1991. Many Nepalese opponents of the monarchy com- 
plained that the military was a reactionary institution bent on 
defending a quasifeudal system of government in the face of mount- 
ing popular calls for democratization. More conservative Nepa- 
lese, however, regarded a strong king and a traditional military 
beholden to royal patronage as essential elements of political sta- 
bility and national independence. During the 1990 Movement for 
the Restoration of Democracy, or prodemocracy movement, which 
transformed Nepal's political system into a broad-based constitu- 
tional monarchy with elected civilian leaders, the army was used 
as a stabilizing force. 

Nepal's military establishment in 1991 consisted of an army of 
35,000 personnel. Organized largely along British lines, the force 
included fourteen infantry brigades, an airborne battalion, an air 
defense regiment, a small air services wing, and a variety of in- 
dependent infantry companies and supporting units. Service in the 
army, an all- volunteer force, generally was held in high esteem by 
the general public; benefits and terms of service were attractive 
by local standards. Although its soldiers generally were well trained 
and highly motivated, Nepal lacked the resources to equip its army 
with anything beyond obsolete imported weapons. The officer corps 
had no political ambitions and invariably carried out the orders 
of the king and civilian authorities. 

Although the military's stated mission was the classic one of 
defending the nation against hostile external attack, internal 
security — assisting the police, patrolling remote areas, and protect- 
ing the monarchy — constituted the military's primary mission. The 



197 



Nepal and Bhutan: Country Studies 

country's precarious geopolitical position between two giant neigh- 
bors, India and China, made anything more than a token conven- 
tional defense impractical. In order to ensure the country's survival, 
Nepalese leaders have traditionally sought to maintain good rela- 
tions with both neighbors and to obtain international recognition 
of Nepal's de jure status as an independent buffer state. The pro- 
tracted trade and transit dispute that poisoned Indo-Nepalese re- 
lations in 1989, although eventually resolved amicably in 1990, 
reinforced the common Nepalese perception of an overbearing In- 
dian government willing to use its economic and military advan- 
tages to intimidate its small Himalayan neighbor. Most Nepalese 
regarded China as a more distant but benign power that served 
as a strategic counterweight to India's supposed hegemonistic am- 
bitions in the region. 

Under the 1990 constitution, control over the nation's military 
is vested in the king, although the elected civilian government ac- 
quired new authority over military affairs and national defense. 
The 28,000-strong Nepalese Police Force, regarded by many ob- 
servers as corrupt and inefficient, became a focus of the Nepali 
Congress Party government that came to power in 1991. The new 
government promised to reform the police system, overhaul the 
judiciary, and improve the country's deteriorating law-and-order 
situation. The constitution instituted significant reforms in human 
rights and judicial practices, both of which were the objects of con- 
siderable domestic and foreign criticism. 

Armed Forces and Society 
Origins of the Legendary Gurkha 

The term Gurkha (or, in Nepali, Gorkha) usually referred to sol- 
diers of Nepalese origin who, over many generations, served in 
the legendary British Brigade of Gurkhas. Other regiments desig- 
nated as Gurkha still served in the Indian Army as of 1991. As 
it has for more than 175 years, Nepal in the early 1990s served 
as a source of recruits for Indian and British Gurkha regiments. 
Retired British Gurkhas also served in specially raised security units 
in Singapore and Brunei. 

Soldiers who served in the Royal Nepal Army usually were not 
called Gurkhas, although they also claimed to be the rightful heirs 
of many of the same martial traditions as their countrymen who 
were recruited to serve in foreign armies. The designation had no 
distinct ethnic connotation but derived from the name of the old 
kingdom of Gorkha (Gurkha), the territory that roughly encompassed 



198 



Nepal: National Security 



the present-day district of Gorkha, in the mountains some fifty- 
six kilometers west of Kathmandu. Soldiers from the kingdom of 
Gorkha established an international reputation for their martial 
qualities during the eighteenth century by their successful inva- 
sions of Tibet. As the Gorkha kingdom expanded eastward across 
the Himalayas to Sikkim, the king's warriors, taken from all groups 
in the area, came to be known as Gurkha soldiers. Legend had 
it that Gurkhas never drew their service-issued kukri (curved Nepa- 
lese knives) without drawing blood, even if it were their own. 
Although probably a tradition of a bygone era, the legend added 
immeasurably to the Gurkhas' reputation for toughness. 

The exploits and legends surrounding the Gurkhas are among 
the more memorable of modern military history. The old Gorkha 
kingdom was established in the mid-sixteenth century by Dravya 
Shah, the founder of the dynasty of Shah Thakuri kings that have 
reigned in Nepal ever since (see The Expansion of Gorkha, ch. 
1). Two centuries later, the Gorkha kingdom began a major ex- 
pansion under the energetic, young King Prithvi Narayan Shah 
(reigned 1743-75), who conquered the Kathmandu Valley and uni- 
fied numerous petty kingdoms while consolidating his control over 
an area substantially the same as that of modern Nepal. The first 
two regular Gurkha regiments, designated Sri Nath and Purano 
Gorakh, were raised in 1763. As Gorkha rule expanded, control 
over the conquered territories was left mainly to district governors 
(bada hakim), who were responsible for establishing military strong 
points and for maintaining a local militia. 

The military prowess of the Nepalese soldier first became known 
in the eighteenth century, when forces from what was then known 
as Gorkha invaded Tibet. Within Nepal itself, certain ethnic groups, 
such as the Magar, Gurung, Limbu, Rai, Chhetri, and Thakuri, 
had much earlier won reputations as "warrior tribes." The Magar, 
Gurung, and Limbu furnished the bulk of the kingdom's soldiers 
up to the rank of captain. Higher ranks tended to be filled from 
the Thakuri, Chhetri, and Rai groups. These officers came almost 
exclusively from families of the ruling elite (see Caste and Ethnicity, 
ch. 2). 

Until the middle of the nineteenth century, armies were raised 
when needed and disbanded when the need expired. This practice 
created a sizable reserve of trained veterans but resulted in a recur- 
ring unemployment problem. In general, only members of the 
higher castes were retained in military service between wars. The 
first steps toward the creation of a sizable permanent military es- 
tablishment were taken by Prime Minister Bhimsen Thapa, who 
governed from 1804-37 and who raised the army's strength from 



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Nepal and Bhutan: Country Studies 

10,000 to 15,000 persons. He also built arsenals, ordnance work- 
shops, and cantonments. The large parade ground constructed at 
Tundhikhel in Kathmandu during that period still was in use as 
of 1991. 

From the Anglo-Nepalese War to World War II 

Before the end of the eighteenth century, Gorkha rulers had sent 
successful military missions into Tibet and China. Pressure to the 
south and west, however, met resistance from the military forces 
of the British East India Company, which were expanding north 
of the Gangetic Plain into the Tarai and the foothills of the 
Himalayas. Increasingly frequent clashes of the opposing forces 
culminated in the Anglo-Nepalese War of 1814-16, in which the 
victorious British forces were impressed by the fighting qualities 
of their Gorkha opponents. When Nepal's General Amar Singh 
Thapa was forced to capitulate west of the Kali River in 1815, the 
remnants of his troops were accepted into the service of the British 
East India Company. By the 1816 Treaty of Sagauli, the British 
recognized the sovereignty of Nepal and received permission to 
recruit Nepalese soldiers (see The Making of Modern Nepal, ch. 1 ; 
Relations with Britain, ch. 4). 

British recruiting efforts, which actually began in 1815, were car- 
ried on semiclandestinely even after the treaty came into force be- 
cause all foreign military representatives were forbidden by Nepalese 
law to enter the country. The three battalions formed from General 
Thapa' s conquered forces were expanded into regiments, and each 
regiment sent its own Gurkha recruiters into the interior. Appli- 
cants for service came almost entirely from the mountain areas. 
The ethnic groups represented included the Limbu and Rai from 
the Kiranti area in the east, the Magar, Gurung, and Tamang from 
the center, and the Chhetri and Thakuri castes from the west. These 
groups, eventually lumped together under the term Gurkha, became 
the backbone of British Indian forces along with other supposed 
"martial races" such as Sikhs, Dogras, Punjabis, and Pathans. 
Throughout the colonial era, the British raised the bulk of their 
military recruits from Nepal, Punjab, and the North- West Frontier. 

The Gurkha reputation for martial prowess and obedience to 
authority was firmly established during the 1857-58 Sepoy Rebel- 
lion, which seriously threatened British ascendancy in South Asia. 
Some 9,000 Nepalese troops under Prime Minister Jang Bahadur 
Rana, in power from 1846-77, rendered valuable service to the 
British (see The Dictatorship of Jang Bahadur, ch. 1). Nepalese 
exploits in relieving the British resident in Lucknow made a lasting 



200 



Xepal: Xational Security 



impression on British officials and strategists. Xepalese troops were 
awarded battle honors, and two additional regiments were raised. 

Recruiting continued, and the adaptability of the Gurkha troops 
to various types and conditions of combat was demonstrated by 
their performance in the Second Afghan War ^1878-80) and in the 
Boxer Uprising (1900). By 1908 the fabled Gurkha brigade had 
been formed. A flexible unit, the brigade numbered about 12.000 
troops in peacetime and was organized in ten regiments, each con- 
sisting of two rifle battalions. Other Gurkha units included the As- 
sam Rifles. Burma Rifles. Indian Armed Police, and Burma 
Military Police. Regiments and battalions were designated numer- 
ically. For example, the Second Battalion of the Seventh Gurkha 
Rifles was commonlv referred to with pride bv its members as the 
2/7/GR. 

Within Xepal itself. Prime Minister Ranoddip Singh, who 
governed from 1877 to 1885. introduced a militia system in the 
early 1880s by which the army could be rapidly expanded on short 
notice — an expedient which proved of great value to future Brit- 
ish war efforts. Prime Minister Chandra Shamsher Rana. in pow- 
er from 1901 to 1929. introduced many military reforms under a 
program to modernize government service. Among measures af- 
fecting the army were the adoption of translated British military 
manuals for the use of troop units, promotion examinations, im- 
proved standards of efficiency, reorganization of administrative 
processes, and payment of all ranks in cash, rather than in land 
tenure (jagir — see Glossary) or grain, as was formerly the practice. 
Despite these reforms, the officer corps above the grade of captain 
continued to be limited to members of the Rana family and to the 
Thakuri. Chhetri. and Rai ethnic groups. Barracks remained in- 
adequate for accommodating all the men in the twenty-six battal- 
ions stationed in the Kathmandu Valley. Many soldiers had to seek 
their own food and lodging in towns and villages outside their gar- 
risons. 

Until 1914 the British recruited about 1.500 men per year to 
keep the twenty Gurkha battalions up to strength. As a rule, men 
from the same ethnic group were assigned to the same units. About 
seven regiments were composed of Magar. Tamang. and Gurung: 
two regiments were recruited from the Rai and Limbu: and one 
from the Chhetri and Thakuri. In many instances, several gener- 
ations of one family served in the same regiment — a practice that 
continued in the early 1990s. The Magar. Gurung. and Rai. who 
over the years have supplied most of the recruits, are most closely 
associated with the fabled Gurkhas, but the Limbu. Chhetri. 
Tamang. Sunwar. and Thakuri also were included in the category. 



201 



Nepal and Bhutan: Country Studies 

On a percentage basis, the Gurung group provided a higher propor- 
tion of its total population for military service than any other group. 

Under the British system, Gurkha regimental representatives ex- 
amined and enlisted recruits within Nepal. From there recruits were 
sent to collection centers in northern India, primarily at Gorakh- 
pur and at Ghum near Darjeeling, for final processing and assign- 
ment to units. The Nepalese government encouraged recruitment 
through assurances that service with British forces would be regard- 
ed as service in the Nepalese army and that special efforts would 
be made to provide employment for returning veterans. This policy 
was based on the view that returning veterans would add to the 
military strength of Nepal during emergencies (see Gurkhas Serv- 
ing Abroad, this ch.). Relatively high pay and pensions as well 
as the opportunities for advancement in noncommissioned ranks 
also helped recruitment efforts. 

During World War 1(1914-18), the army was expanded and six 
new regiments, totaling more than 20,000 troops — all volunteers — 
were sent to India, most of them to the North-West Frontier 
Province, to release British and Indian troops for service overseas. 
Simultaneously, the Nepalese government agreed to maintain 
recruitment at a level that both would sustain the existing British 
Gurkha units and allow the establishment of additional ones. The 
battalions were increased to thirty-three with the addition of 55,000 
new recruits, and Gurkha units were placed at the disposal of the 
British high command for service on all fronts. Many volunteers 
were assigned to noncombat units, such as the Army Bearer Corps 
and the labor battalions, but they also were in combat in France, 
Turkey, Palestine, and Mesopotamia. The Rana prime ministers 
urged Nepalese males to fight in the war. Of the more than 200,000 
Nepalese who served in the British Army, there were some 20,000 
Gurkha casualties. 

Following the war, the Nepalese government requested that Brit- 
ain cede portions of the Tarai in recognition of Kathmandu's con- 
tribution to the Allied war effort. London refused, but the Treaty 
of Perpetual Peace and Friendship, signed in December 1923, grant- 
ed "unequivocal" recognition of Nepal's independence. This treaty 
formed the basis for Nepal's continued independence following the 
British withdrawal from India in 1947 (see The Rana Oligarchy, 
ch. 1). 

In 1919 at the height of a civil disobedience campaign called by 
the Indian National Congress, Gurkha troops serving under Brit- 
ish brigadier R.E.H. Dyer brutally suppressed a pro-independence 
political gathering in a walled courtyard outside the Sikh holy temple 
in Amritsar. Acting under Dyer's orders, the Gurkhas killed some 



202 



Nepal: National Security 



300 persons and wounded approximately 1,200 others. The epi- 
sode generally was considered a watershed in the Indian indepen- 
dence movement. The Indian public, however, held Dyer and the 
British government responsible for the massacre and did not blame 
the soldiers who carried out the order to fire on unarmed civilians. 

The British call to arms during World War II (1939-45) met 
with an enthusiastic response from the Rana prime ministers who 
again coerced Nepalese citizens into joining the British Army. At 
the outset of the war, ten Nepalese battalions arrived in India, where 
they served until the hostilities ended. By the close of 1946, vari- 
ous specialized units, such as paratroops, signal corps, engineers, 
and military police, had been established. Other elements served 
in Southeast Asia, particularly in Burma. The total number of 
Gurkha battalions in the British service increased to forty-five. In 
all, over 200,000 men passed through ten Gurkha training centers 
to serve in line units that fought on almost every front, although 
primarily in the Burmese, Middle Eastern, and North African the- 
aters. Casualties in all theaters amounted to over 25,000 persons. 
Gurkha unit histories are replete with accounts of courageous stands 
in the face of heavy odds. In the two world wars, twelve Victoria 
Crosses (comparable to the United States Medal of Honor) were 
awarded to Gurkha soldiers. 

Arrangements after World War II 

The British ended their two-century rule over the subcontinent 
after World War II and agreed to an independent India, shorn of 
its Muslim-majority areas that had formed the new nation of 
Pakistan. Unlike most territories belonging to native princes, which 
were soon absorbed into the British successor states of India and 
Pakistan, Nepal and its feudal dynasty survived the British with- 
drawal intact. Still an independent entity, Nepal thus became a 
small South Asian state wedged between Asia's greatest land pow- 
ers, India and China. Nepal nevertheless continued to provide a 
fertile recruiting ground for the British and Indian armies. 

Under a tripartite agreement signed in 1947 by Nepal, India, 
and Britain, the Gurkha brigade was divided between British and 
Indian forces. Four regiments remained in the British service, and 
six passed to the new Indian Army, which recruited an additional 
regiment for a total of seven. Gurkha units in both military estab- 
lishments played an important role throughout the postcolonial peri- 
od. Gurkhas formed the backbone of the British counterinsurgency 
effort in Malaya that, by 1960, had crushed the communist offen- 
sive on the peninsula. Other Gurkha units fought in the defense 
of North Borneo against Indonesian- sponsored guerrillas in the early 



203 



Nepal and Bhutan: Country Studies 

1960s and also in the 1982 British campaign against Argentine forces 
in the Falkland Islands (called Islas Malvinas by Argentina). 
Throughout this period, Gurkha units were the mainstay of the 
British garrison in Hong Kong, which was scheduled to revert to 
China in 1997. 

Gurkhas in the service of India have also played an important 
and colorful role in national defense, despite the early complaints 
of Indian nationalists that Nepalese soldiers were acting as British 
mercenaries or tools of the Ranas. According to Leo E. Rose, a 
noted historian of the period, "However critical the [Indian] Con- 
gress party may have been about the use of the Gurkhas by the 
British, their value was quickly recognized." The Rana regime 
sought to counter Indian criticism by specifying that Gurkhas in 
the Indian Army could not be used against Nepal, other Gurkha 
units, Hindus, or "unarmed mobs." No restrictions were imposed, 
however, on their use against Muslim mobs or against external 
enemies, including Pakistan and China. 

Gurkhas, some of whom came from Nepalese families resident 
in the Indian Tarai, served with distinction in India's three wars 
with Pakistan (1947-48, 1965, and 1971). Many Indian Gurkhas 
also were stationed in the former North-East Frontier Agency 
(Arunachal Pradesh) when Chinese forces overran beleaguered In- 
dian outposts along the disputed Sino-Indian frontier in 1962. A 
battalion served with distinction in the Congo (now Zaire) in the 
1960s as part of the Indian Army contingent in the United Na- 
tions Operations in the Congo. Several battalions served with the 
Indian Peacekeeping Force in Sri Lanka from 1987 to 1990. 

After World War II, the end of the British Raj (1858-1947), 
and the anti-Rana revolt of 1950-51, Nepal struggled to find its 
identity in a vastly changed Indian subcontinent. By 1950 all im- 
portant army posts were held by members of the Rana ruling fam- 
ily. Many of the battalions had just returned from war duties in 
India and Burma; the battalions included some soldiers who had 
defected from British units and fought with the Japanese as part 
of the Indian National Army. The returning soldiers found that 
pay, rations, equipment, housing, and general conditions of ser- 
vice in Nepal contrasted unfavorably with what they had known 
under the British. Many of the general officers had never served 
in the lower ranks. The bulk of the army was stationed in the Kath- 
mandu Valley, where the Rana government, aware of growing op- 
position, could keep potentially disloyal officers under surveillance. 
As remained true in 1991 , British recruiters attracted the best can- 
didates for military service because of improved prospects for ad- 
vancement and higher pay. Those unable to land positions in the 



204 



Nepal: National Security 



Brigade of Gurkhas usually opted to serve in the Indian Army, 
leaving the Royal Nepal Army with the remaining large pool of 
recruits from which to choose. 

Many World War II veterans were discharged at the end of their 
enlistments. Many of the officers who remained in service were 
unqualified to give proper training to the young replacements, and 
poor pay added to mounting discontent. By the time the revolt be- 
gan in 1950, many soldiers were predisposed to defect to the anti- 
Rana forces (see The Return of the King, ch. 1). Most soldiers, 
however, remained loyal or, at a minimum, did not lend active 
support to political forces attempting to overthrow the Ranas. The 
officer corps, however, remained staunchly loyal to the king 
throughout the crisis. The organization leading the revolt, the Nepa- 
li Congress Party, developed a distrust of the army leadership that 
reportedly still persisted in some quarters in 1991 . At the same time, 
memories of India's moral and limited materiel support for the 1950 
uprising led some sections of the military to question the national 
loyalties of the Nepali Congress Party. 

Legal Basis under the 1990 Constitution 

The promulgation of the constitution in November 1990 opened 
a new era in Nepalese civil-military relations. Under the Ranas 
and the two monarchs of modern times, King Mahendra Bir Bikram 
Shah Dev (reigned 1955-72) and Birendra Bir Bikram Shah Dev 
(reigned 1972- ), military and national defense decisions were 
the sole prerogative of the palace, acting on the advice of a small 
coterie of retainers and senior military commanders. Decisions were 
not ordinarily subject to the approval of elected bodies other than 
the narrowly based Rashtriya Panchayat, or National Panchayat, 
which served as a rubber stamp for the palace (see The Panchayat 
System under King Mahendra, ch. 1; The Panchayat Constitu- 
tion, 1962, ch. 4). 

Under the new constitutional order, the king retains his tradi- 
tional authority as the supreme commander of the armed forces. 
The king, however, is not the sole source of authority in Nepal 
but rather a symbol of national unity. In a major break from past 
constitutional experiments, sovereignty is vested in the people, not 
in the person of the king. The distinction is important in that the 
military no longer acts solely as an instrument of the king but also 
is in principle subordinate to the authority of the popularly elect- 
ed Parliament (see The Constitution of 1990, ch. 4). 

During the protracted discussions that occurred in 1990 over the 
outlines of the new constitution, King Birendra, fearing that a fu- 
ture civilian government might radically undercut the military's 



205 



Nepal and Bhutan: Country Studies 

prestige and with it the monarch's power or very existence, report- 
edly insisted on retaining ultimate authority over the military. Hav- 
ing to contend with independent centers of power that were beyond 
his direct control, Birendra realized that the military was his only 
reliable institutional base of support. Military commanders, for their 
part, feared that civilian politicians might attempt to politicize the 
army and undermine discipline. Consequently, the 1990 constitu- 
tion represents a compromise between the king, who still retains 
many avenues to power should he choose, and a newly empowered 
civilian government. 

Several provisions circumscribe the palace's previously unfet- 
tered right to employ the army as it sees fit. Unlike the legislature 
under the 1962 Panchayat Constitution, Parliament has real au- 
thority to determine and approve the annual defense budget. Al- 
though the role is not specified in the constitution, the civilian 
minister of defense oversees the day-to-day operations of the mili- 
tary. Conceivably, an assertive Parliament could hobble the king's 
authority over the army by denying funds. Day-to-day decisions 
affecting national security and military affairs are implemented by 
the king only with the advice and consent of the elected civilian 
government. 

The power to appoint a chief of army staff, another traditional 
royal prerogative that afforded the palace direct control over the 
military, also is subject to the recommendation of an elected prime 
minister. This provision has the potential to precipitate a constitu- 
tional crisis should the king refuse the recommendation of the prime 
minister. The constitution offers no guidance should such a dis- 
agreement arise. In the first test of this clause, however, the newly 
elected Nepali Congress government of Girija Prasad (G.P.) Koirala 
assented to the appointment of General Gadul Shumsher Jang Ba- 
hadur Rana to head the Royal Nepal Army within days after as- 
suming office in May 1991 . The prime minister, the king, and the 
army were anxious to demonstrate that the new constitutional order 
was working. 

Article 1 18 of the constitution mandates the formation of a three- 
person National Defence Council consisting of the prime minister, 
who chairs the body; the defense minister; and the chief of army 
staff, the nation's senior uniformed officer. According to this pro- 
vision, the king "shall carry out the administration and deploy- 
ment of the Royal Nepal Army on the recommendation of the 
National Defence Council." Although as of late 1991 there was 
no clear indication of the role this hybrid body performed, its for- 
mation underscored the insistence of King Birendra and the army 
that Parliament must not be solely responsible for national defense. 



206 



Soldiers at Sagarmatha National Park Headquarters 
Courtesy Janet MacDonald 

Accordingly, the National Defence Council will probably act as 
an intermediary body between the Parliament and the king where 
decisions affecting the military will be debated and negotiated. Un- 
der this arrangement, the army, still a critical component of polit- 
ical stability, also retains a formal say in national security affairs. 

Despite Nepal's transition from an absolute monarchy to a 
democracy, the king retains formidable emergency powers that, 
if activated, would decisively tip the political balance of power in 
his favor. Article 115, "Powers to Remove Difficulties," grants 
the king the unilateral right to proclaim a state of emergency in 
the event of a "grave crisis created by war, external attack, armed 
revolt or extreme economic disorder." Under a state of emergen- 
cy the king assumes direct rule and "may issue necessary orders 
as are designed to meet the exigencies." Authority to implement 
this provision is not clearly spelled out, but the king is specifically 
authorized to suspend fundamental rights, except for habeas cor- 
pus and the right to organize political parties and unions. The 
proclamation of an emergency must be submitted to the lower house 
of Parliament within three months for approval by a two-thirds 
majority, after which it may remain in effect for six months, with 
one six-month renewal period. Although this provision was untested 
as of September 1991, the king clearly has the authority to dissolve 



207 



Nepal and Bhutan: Country Studies 

the government and muster the nation's security forces to enforce 
royal decrees, if the situation warrants. 

Provisions relating to the conduct of foreign affairs also have na- 
tional security implications. Under Article 126, treaties with for- 
eign governments must be ratified by a two-thirds majority of both 
houses of Parliament as opposed to the simple majority required 
for other bills. Specifically, the constitution mandates a two-thirds 
majority parliamentary assent to treaties bearing on ' 'peace and 
friendship," defense and strategic alliances, the demarcation of na- 
tional boundaries, and "national resources and distribution in the 
utilization thereof. ' ' One provision forbids passage of any treaty 
or agreement that "compromises the territorial integrity of Nepal." 
The rationale for these restrictions, although not spelled out in the 
constitution itself, clearly reflects widespread suspicions on the part 
of political parties and, in particular, the Nepalese public that an 
overbearing India might press for, or even dictate, treaty terms 
unfavorable to Nepal (see The Security Environment, this ch.). 

Organization of the Armed Forces 

The organizational structure of the Nepalese defense establish- 
ment reflected the country's indigenous military traditions, its long 
association with the British military, and reforms introduced by 
Indian military advisers in the 1950s and 1960s. There was strong 
reason to suspect that the basic changes introduced by the consti- 
tution as a result of the success of the prodemocracy movement 
would, in time, lead to new organizational arrangements and 
changes in command and control in line with the political realities 
that emerged in the early 1990s. 

Following the British pattern, there was a Ministry of Defence, 
which, in conjunction with the king and the Parliament, was respon- 
sible for overseeing the military establishment. As with other 
government ministers, the minister of defense (a portfolio assumed 
by Prime Minister G.P. Koirala upon his government's assump- 
tion of office on May 29, 1991) was a cabinet official appointed 
by the prime minister. Under previous constitutions, the king or- 
dinarily assumed the role of minister of defense, although routine 
oversight of the ministry was performed by a civilian bureaucrat 
or army officer who served at the pleasure of the king. The Minis- 
try of Defence, located in Kathmandu, was responsible for over- 
seeing routine matters such as pay, budget, and procurement, 
although the army high command retained broad discretion in mat- 
ters relating to promotions and recruitment. Real command 
authority over military operations was generally reserved for the 
king, who acted in accordance with the wishes of the National 



208 



Nepal: National Security 



Defence Council and the elected civilian government. As of 
mid- 1991 , the degree of influence these newly chartered organiza- 
tions had over military affairs could not be determined. 

The nation's sole regular armed force was the Royal Nepal Army, 
also headquartered in Kathmandu. There was no separate air force. 
The army, however, operated a small air wing, primarily to trans- 
port troops within the country and to aid the civilian population 
during natural disasters. Because Nepal is landlocked, the coun- 
try had no naval capabilities beyond a few small launches used by 
the army to patrol lakes and ford rivers (see Geography, ch. 2). 

The Royal Nepal Army headquarters was patterned after the 
British and Indian systems. The highest post in army headquar- 
ters was that of chief of army staff, the only four- star billet in 1991 . 
Directly below the chief were five staff sections: inspector general, 
quartermaster general, adjutant general, major general of ordnance, 
and the general staff general (see fig. 11). All sections were head- 
ed by major generals, a two-star billet. Of the five sections, the 
most important was the general staff general, as all army field eche- 
lons reported to army headquarters through him. This office also 
controlled functional directorates dealing with military operations, 
training, military intelligence, infantry brigades, and support units. 

Defense Spending 

Nepal was one of the poorest nations in the world. With a per 
capita income ranging from US$158 to US$180 per year, about 
40 percent of the population living in conditions of absolute poverty, 
and virtually no marketable national resources, the country's fis- 
cal resources for maintaining a standing army were woefully in- 
adequate (see The Five- Year Plans, ch. 3). To compound matters, 
the country had virtually no capacity to provision its military be- 
yond the most basic items such as food, clothing, and small-arms 
ammunition. Almost all of the army's equipment needs, such as 
air-defense guns and aircraft of all kinds, and its requirements for 
overhauling major equipment items were purchased abroad through 
scarce foreign exchange reserves or concessional terms. By any stan- 
dard, the Royal Nepal Army faced severe resource constraints, even 
in comparison with other less-developed countries. 

Nevertheless, resources earmarked for the military represented 
a modest defense burden. According to 1989 estimates, approxi- 
mately US$33 million, or 1.2 percent of the gross national product 
(GNP — see Glossary), was budgeted for defense. The defense outlay 
represented approximately 6.2 percent of the central government 
expenditures budget. Health, education, and economic development 
clearly took priority over defense (see Regular and Development 



209 



Nepal and Bhutan: Country Studies 



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Nepal: National Security 



Budget, ch. 3). Defense budget figures must be used with caution, 
however. Most observers suspected that actual outlays for the mili- 
tary were buried in other budget categories or else handled dis- 
creetly under accounts controlled by the royal family. Much of the 
defense budget, however, paid for routine recurring costs, partic- 
ularly salaries and pensions. The defense budget traditionally was 
not subjected to close public scrutiny, and all but the most gener- 
alized statistics were a closely guarded secret. As of mid- 1991, it 
was unclear whether this pattern would hold true. The Parliament, 
now genuinely representative, was constitutionally responsible for 
passing the annual budget and overseeing national defense require- 
ments, but had not yet had a chance to prove itself in practice. 

Missions 

National Defense 

The primary mission of the armed forces was defense of territorial 
integrity against external attack. Wedged between India and Chi- 
na, however, Nepal was clearly unable to mount anything more 
than a token conventional defense in the face of overwhelming odds. 
By necessity, governments in Kathmandu have always had to rely 
on diplomacy and the restraint of neighbors, rather than Nepal's 
military strength, to ensure national survival. During peacetime, 
the army's routine border defense duties included assisting the police 
in antismuggling operations and providing security in remote 
regions where there was no police presence. 

In the event of conventional attack by either China or India, 
Nepalese military forces would mount a token defense to stall the 
enemy advance until international pressures could be mobilized 
to bring about a cease-fire and a return to the status quo. If inter- 
national mediation failed, the military and police units that re- 
mained intact would withdraw from populated areas to lead a 
guerrilla war against occupation forces. Substantial numbers of 
Gurkha and Royal Nepal Army veterans also would be pressed 
into service, thereby multiplying the available military forces two 
or threefold. Nepal's position as a buffer state between two histor- 
ically antagonistic powers also dictated that a beleaguered govern- 
ment in Kathmandu probably would appeal for assistance from 
the nonbelligerent neighbor. 

Most of Nepal's population outside the Kathmandu Valley lived 
in hamlets that were either cut off from the rest of the country or 
else connected only to a local economy and communications infra- 
structure. Hence, the loss of some rural districts during a conven- 
tional conflict would not necessarily bring about the capitulation 



211 



Nepal and Bhutan: Country Studies 

of the entire country. Semiautonomous guerrilla bands acting un- 
der the direction of retired or serving military officers could oper- 
ate almost indefinitely and substantially raise the costs of an 
occupying force. However, loss of the valley, the political and cul- 
tural nerve center of the nation, could well mean the end of or- 
ganized resistance. Partly for this reason, Nepal's national defenses 
were deployed primarily to defend the capital area in general and 
the national leadership in particular. 

Geography also limited Nepal's capacity to mount a conventional 
defense of the nation. Although the Himalayas provided a nearly 
impenetrable shield against large-scale, rapid movement of troops 
from China, the harsh terrain also prevented Nepalese forces from 
erecting significant defenses along the 1,236-kilometer border. A 
paucity of roads, bridges, and airfields in the region would con- 
fine the Nepalese military response to provisioning scattered border 
outposts and positions near the mountainous tracks leading to some 
fifteen passes along the northern border (see Roads, ch. 3). The 
only land corridor of any significance in a conflict with China would 
be the main road, built with Chinese assistance, that connected 
Kathmandu with Tibet. New Delhi has repeatedly expressed its 
fears that the road could serve as a Chinese invasion route, not 
a Nepalese resupply route. 

Mounting a conventional defense against India posed an equal- 
ly daunting challenge. India boasted significant ground force as- 
sets along its 1,690-kilometer border with Nepal; moreover, these 
formations were connected by extensive lines of communication 
to the Indian heartland, where reinforcements could be introduced 
into Nepal in short order. Nepal had virtually no combat air capa- 
bility and its rudimentary air defense assets were no match for the 
Indian Air Force, second in size and capabilities only to China's 
among Asia's air forces. Within Nepal, defense against a concerted 
Indian advance in the jungles and foothills of the Tarai was clearly 
impractical. Although the East- West Highway, or Mahendra High- 
way, connecting the extreme ends of the country was nearing com- 
pletion in 1991, most of Nepal's approximately 4,500 kilometers 
of all-weather, motorable roads ran north-south, thereby complicating 
cross-country military movements. Avenues of approach leading 
north from India were considerably better developed than the 
generally primitive east-west lines of communication available to 
Nepalese forces. The country's rail network was limited to a forty- 
eight-kilometer spur line running from the border town of Raxaul 
to Amlekhganj and a fifty-three-kilometer narrow-gauge track from 
the Indian border town of Jaynagar to Janakpur and Bijalpura in 
Nepal. 



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Nepal: National Security 



Internal Security 

Owing to its historical position as an instrument of royal authori- 
ty, the army had always assumed the role of protecting the king 
against threats to his political as well as physical survival. In the 
modern era, the 28,000-strong Nepalese Police Force ordinarily 
was the first line of defense in combating incidents of political and 
criminal violence (see The Police System; The Judicial System, 
this ch.). A primary mission of the army, however, was to back 
up the police whenever additional coverage or firepower was re- 
quired. This mission, known as "aid-to-the-civil-power" in Brit- 
ish parlance, posed risks for the regular army. Detailing soldiers 
to arrest demonstrators, root out subversives, and fire on crowds 
risked tarnishing the army's reputation for impartiality. Moreover, 
overuse of the army in domestic peacekeeping tasks undermined 
military morale and discipline, upset routine training cycles, and 
diverted soldiers from conventional defense chores, such as border 
security. Ordinarily, the army preferred to leave routine internal 
security chores to the police. 

The army has performed aid-to-the-civil-power duties, including 
riot control and disaster relief. In the 1960s and 1970s, for example, 
the army conducted sporadic counterinsurgency operations against 
Tibetan Khampa guerrillas operating in the remote mountains 
of northwestern Nepal. The campaign, which was finally suppressed 
in 1974, employed small army units trained in counterguerrilla 
tactics. 

The army faced its most severe test during the strikes and demon- 
strations called by the Movement for the Restoration of Democra- 
cy, or prodemocracy movement, in the spring of 1990. The 
prodemocracy movement, composed of a broad spectrum of polit- 
ical parties led by the Nepali Congress Party and the United Left 
Front (a group of seven communist parties), staged a civil disobe- 
dience campaign in support of its demands for sweeping constitu- 
tional reforms. The police responded to the crescendo of protests 
by arresting movement leaders, closing the university and colleges, 
and censoring news reports of the disturbances. When these mea- 
sures failed to check the demonstrations, security forces made mass 
arrests and resorted to firing on unruly, although usually unarmed, 
crowds. By March 1990, army units were heavily involved in put- 
ting down the protests and often staged "flag marches," or shows 
of force, to prevent crowds from gathering or to signal the govern- 
ment's determination to enforce emergency regulations. On April 
6, the day after King Birendra reorganized his government and 
agreed to institute constitutional reforms, a crowd of as many as 



213 



Nepal and Bhutan: Country Studies 

200,000 strong gathered in downtown Kathmandu. By all accounts, 
the army panicked and fired on the crowd as it approached the 
palace, killing at least twenty-five protesters. All told, security forces 
reportedly killed at least fifty persons during the height of the pro- 
tests between February and April. 

The national elections held in May 1991 witnessed an un- 
precedented peacetime mobilization of military force in Nepal. 
Many observers of the Nepalese political scene predicted widespread 
violence. To head off any trouble, the entire army was put on alert 
and deployed throughout the country to ensure a free and fair elec- 
tion. Its missions included protecting polling booths, monitoring 
campaign rallies, and patrolling streets and highways. In addition, 
42,000 retired police and soldiers were pressed into temporary ser- 
vice. By all accounts, the army performed well. A minimum of 
violence and few electoral irregularities were reported (see Elec- 
tions, ch. 4). Once the voting was completed, the army returned 
to the barracks, police auxiliaries were relieved of their duties, and 
the regular police force resumed normal duties. 

Force Dispositions and Capabilities 

In 1991 the Royal Nepal Army, numbering approximately 
35,000, was the country's sole military force. Army organization 
followed the British pattern. Field formations included fourteen in- 
fantry brigades. The brigades were numbered consecutively from 
one through sixteen (minus numbers eight and twelve, which were 
considered inauspicious according to Hindu astrology). The four- 
teen brigades, in turn, controlled a variety of units, including in- 
fantry battalions, an airborne unit, an air defense regiment, a signal 
battalion, a transportation regiment, an armored car company, and 
an unknown number of independent infantry companies and spe- 
cial forces units. 

One of the army infantry battalions served as part of the Unit- 
ed Nations Interim Force in Lebanon (UNIFIL) and performed 
peacekeeping duties in the Arab-Israeli dispute. Personnel in this 
battalion served six-month tours of duty, after which they returned 
home and were replaced by personnel drawn from other units on 
a rotating basis. Selection for service in UNIFIL was highly coveted 
by soldiers of all rank because those who served abroad received 
United Nations-scale pay and perquisites, as well as the opportu- 
nity to purchase consumer items that were unavailable or prohibi- 
tively expensive at home. 

The peacetime disposition of forces underscored the fact that the 
army's primary mission was to back up local police in maintain- 
ing security in the Kathmandu Valley, the seat of government and 



214 



Nepal: National Security 



the linchpin of political stability in the country. Fully half of the 
army brigades were garrisoned in or around the capitol, including 
the elite Royal Guards Brigade (the ninth) that served as the monar- 
chy's praetorian guard. Additionally, many of the independent and 
specialized army units were attached to brigades stationed in Kath- 
mandu. These units included an airborne battalion (known as the 
"para battalion") and various signal, engineer, artillery, trans- 
port, and medical units. Brigade headquarters outside the capital 
were located at Pokhara, Dipayal, and other towns across the coun- 
try. Each of the brigades bore a distinctive unit nomenclature af- 
ter the British fashion and wore distinctive arm patches. Lower 
echelon designations within each brigade included squadrons and 
troops (equivalent to United States Army companies and platoons, 
respectively). 

Throughout its modern existence, the army has had to cope with 
shortages of virtually every category of weapon and equipment. 
Inventory consisted mostly of obsolete weapons purchased from, 
or donated by, India and Britain. This equipment included Ferret 
scout cars, various calibers of towed artillery pieces and mortars, 
and a diverse array of small arms. During wartime and declared 
national emergencies, the military had the authority to comman- 
deer private and state-owned transport assets, such as trucks and 
buses for ferrying troops and supplies. Some miscellaneous equip- 
ment items, such as communications gear, small arms, and air 
defense guns, were purchased from France, Germany, the United 
States, and China. Nepal lacked both the financial resources to pur- 
chase major equipment items and a foreign benefactor willing to 
supply armaments on a grant or concessional basis. Consequent- 
ly, it was unlikely that Nepal could sustain high-intensity combat 
operations without massive foreign assistance provided on a time- 
ly basis. 

The army also supported a modest air wing known as the Royal 
Nepal Army Air Service. Based in Kathmandu and subordinate 
to a brigade, the organization was established in 1979. Its missions 
were to transport troops to far-flung outposts that were inaccessi- 
ble by road, to fly paratroopers to drop zones, and to assist in civilian 
relief operations in the aftermath of natural disasters such as floods 
or avalanches. In 1991 the army air service inventory included fixed- 
wing aircraft, such as Indian-made HS-748 turboprops, Skyvans, 
and a DeHaviland Twin Otter. Its helicopter inventory included 
Pumas, a Bell 2061, Allouettes, and Chetaks (Indian-made Al- 
louettes). In all, the air order of battle totalled about fourteen air- 
craft of all descriptions, none of which was believed to be armed 
with guns or missiles. Consequently, the army air service was 



215 



Nepal and Bhutan: Country Studies 

considered a logistics support element as opposed to an offensive 
strike asset. 

Pilots were trained abroad, primarily in India and Britain. The 
force reportedly suffered critical shortages of maintenance personnel, 
owing to the scarcity of technically competent recruits and the at- 
traction of lucrative job offers in the Persian Gulf and elsewhere. 
There were thirty-six airfields in Nepal that could be used for mili- 
tary airlift operations. Many of the airfields were configured for 
short takeoff and landing (STOL) aircraft operated by Royal Nepal 
Airlines, the government-owned commercial airline. Commercial 
aircraft could be pressed into military service during emergencies 
(see Civil Aviation, ch. 3). In 1991 the inventory of Royal Nepal 
Airlines totalled eighteen aircraft. 

Recruitment, Training, and Morale 

In 1991 recruitment into the all- volunteer Royal Nepal Army 
theoretically was open to all citizens regardless of caste, religion, 
or ethnic background. In practice, however, recruits tended to be 
drawn from the ethnic and caste groups that have traditionally sup- 
plied the bulk of the Nepalese and Gurkha regiments; the military 
apparently preferred to recruit from ethnic groups drawn from the 
mountain areas and the Kathmandu Valley (see Armed Forces and 
Society, this ch.). Not only were these groups the traditional source 
of military recruitment, but they generally were presumed to be 
untainted by any real or imagined loyalties to India. As with simi- 
lar complaints leveled against Kathmandu' s preferential recruit- 
ment policies for government service, residents of the Tarai Region 
voiced complaints of official discrimination in military recruitment. 
According to press reports, residents of the Tarai Region, known 
as madhesis ("midlanders"), constituted some 40 percent of Nepal's 
population but were severely underrepresented in the army and 
police. More than 89 percent of the country was Hindu; accord- 
ingly, the religious composition of the army was thought to be 
almost exclusively Hindu, with a smattering of Buddhists. 

Even though Nepalese, British, and Indian recruiters compet- 
ed annually for the best candidates for military service, none of 
the forces had ever encountered a dearth of recruits. In a popula- 
tion of over 19 million persons, there were about 4.5 million phys- 
ically fit males between the ages of fifteen and forty-nine available 
for military service; about 225,000 males annually reached mili- 
tary age, which was eighteen years (see Population, ch. 2). In the 
early 1990s, the army revealed no personnel mobilization plan in 
the event of war or a declared national emergency, nor was there 
any known contingency plan to institute conscription during or in 



216 



Parading on New Road, Kathmandu, in celebration of the 
royal kumari, the virgin goddess 
Courtesy Harvey Follender 

anticipation of an emergency. Retired soldiers, however, customarily 
were regarded as a valuable resource that the government could 
rely upon during wartime. Over 100,000 military pensioners of the 
Nepalese, Indian, and British armies resided in Nepal. This group 
could provide a pool of military personnel in an emergency. All 
Nepalese service personnel were liable for call-up after retirement. 

The different languages that characterized the social mosaic of 
Nepalese society posed no formidable obstacle because virtually 
all soldiers spoke Nepali (referred to in British and Indian regi- 
ments as "Gurkhali"). Most officers, because of the higher educa- 
tional requirements demanded of them, possessed at least a limited 
knowledge of English. Personnel who aspired to be general officers 
or to attend military training courses abroad invariably were fluent 
in English. 

Caste and ethnic differences were minimized by the longstand- 
ing policy of assigning recruits from the same area and ethnic groups 
to the same unit, a policy also practiced in British and Indian Gur- 
kha regiments. Low-caste enlistees often were assigned to service 
units, whereas officer ranks were staffed largely by upper-caste 
recruits (primarily Chhetris) and those applicants with long family 
histories of army service. 



217 



Nepal and Bhutan: Country Studies 

Women played a marginal role in the armed forces in the early 
1990s. Professional opportunities for women in Nepal were re- 
stricted. A woman's station in life generally was confined to rais- 
ing children, maintaining the home, and performing agricultural 
and handicraft labor (see Women's Status and Role in Society, 
ch. 2). A limited number of women served in the armed forces as 
physicians, nurses, nursing assistants, and parachute packers at- 
tached to the para battalion. Pay scales were the same as those of 
males, although prospects for promotion within the few job cate- 
gories open to women were limited. 

Recruitment regulations prescribed that qualified candidates for 
enlistment appear before a selection and recruiting board composed 
of an officer from the Department of the Adjutant General and 
four other officers. Candidates were required to be between eigh- 
teen and twenty-three years of age, physically fit, and at least 161 
centimeters tall. Exceptions were made for honorably discharged 
former Gurkha soldiers who were under the age of thirty-six, phys- 
ically fit, and had not been convicted of a criminal offense. Ap- 
pointment was confirmed only after the candidate's statements 
regarding residence, age, caste, and address were attested to by 
the army or civil service. A recruit could be dismissed at any time 
during the first year of training. 

Upon entering the service, the recruit signed a contract to par- 
ticipate in drills and training prescribed by army regulations and 
to obey orders wherever he or she might be sent. Enlistment last- 
ed for an initial period of ten years, except for former Gurkhas, 
who enlisted for three years. All recruits were required to take an 
oath to protect the life and throne of the king and to arrest or report 
any person threatening the king. As of 1991, the army had not 
revised this oath so that recruits also swore to uphold the constitu- 
tion, as was the practice in many democracies. Military indoctri- 
nation at all levels still was closely associated with the defense of 
the king, who many Nepalese regarded as the reincarnation of the 
Hindu god Vishnu. Devotion to duty thus carried with it a marked 
element of religious devotion to the person of the king (see Religion 
and Society, ch. 2). 

Military pay scales generally were the same as Nepalese govern- 
ment civilian pay scales. Although they were abysmally low by 
Western standards, military pay and benefits were quite attrac- 
tive by Nepalese standards, and military service was highly sought 
after. Moreover, job security, promotion prospects, and econom- 
ic attractions offered by military service were virtually unmatched 
in the small private sector, particularly for applicants with limited 
education and job skills. Pay scales also included allocations for 



218 



Nepal: National Security 



rations and travel allowances while on duty and en route home dur- 
ing leave periods. Officers received housing, medical, and educa- 
tional benefits, and family allowances that also were attractive by 
Nepalese standards. Soldiers earned pensions after seventeen years 
of service; maximum pension benefits could reach 60 percent of 
a soldier's final pay rate. 

The army maintained a liberal leave policy that contributed to 
good morale. Leave was of three types: ordinary, home, and sick. 
The maximum twenty days' annual ordinary leave was not cumula- 
tive from year to year. Home leave accrued to soldiers after one 
year of service at the rate of forty-five days each year. Sick leave 
of up to fifteen days annually was authorized. Ration and travel 
allowances were included as part of the leave policy. 

Beyond pay and leave, other factors that contributed to good 
morale within the ranks included opportunities to acquire an edu- 
cation and job skills — attributes that were transferable to civilian 
life. Moreover, military service carried with it the prestige of serv- 
ing in a profession that was highly regarded by most of the Nepa- 
lese public. 

The quality of military personnel, particularly within the enlist- 
ed ranks, was regarded by most observers as excellent. Nepalese 
troops are renowned for their toughness, stamina, adaptability to 
harsh climates and terrain, and willingness to obey orders. 

Because the incidence of infectious diseases was high in the gen- 
eral population, malaria, tuberculosis, syphilis, and dysentery prob- 
ably were present in any pool of recruits in spite of efforts to screen 
out the physically unfit before enlistment. In the service, however, 
medical care, adequate diet, and hygienic measures greatly reduced 
the incidence of disease, and experience in the varied environments 
of Asia, Europe, North Africa, and the Middle East has shown 
that illness in Nepalese units was not a serious problem. As of 1991 , 
there was no indication that the army screened recruits or serving 
personnel for acquired immune deficiency syndrome (AIDS), and 
there were no publicly revealed statistics citing the incidence of 
AIDS within the military. 

Before assignment to units, enlistees received almost a year of 
training under officers and noncommissioned officers specially cho- 
sen for this task. The long training period was necessitated by the 
high illiteracy rate — almost 70 percent nationally — making the 
recruitment of soldiers with anything beyond a rudimentary edu- 
cation difficult. Many recruits had to be taught elementary skills, 
such as using a telephone and driving. On the whole, soldiers prob- 
ably were sufficiently trained for effective guerrilla operations or 
for combat in small units — the types of warfare most likely to occur. 



219 



Nepal and Bhutan: Country Studies 

The army supported a number of schools scattered around the coun- 
try that instructed individual personnel and whole units in special- 
ized skills, such as jungle operations, communications, medicine, 
and mountain warfare. A limited number of enlisted personnel and 
noncommissioned officers were sent to India each year for special- 
ized training not offered in Nepal. 

Training for aid-to-civil-power duties, such as riot control, was 
not covered extensively during the training cycle. The military 
generally preferred to let the police perform such functions, which 
most senior officers trained under the British model did not regard 
as 4 'proper soldiering." That army personnel were, of necessity, 
becoming better acquainted with police tactics was suggested by 
the increased use of the army in aid-to-civil-power duties during 
the riots and protests that rocked the country during the 1990 
prodemocracy movement, the massive army deployment to pre- 
vent violence during the national elections staged in May 1991, 
and the peacekeeping experience acquired during service in 
Lebanon. 

Officer training was modeled on that of the Indian Army. This 
training, in turn, was strongly influenced by its long association 
with the British military establishment. An Indian Military Mis- 
sion arrived in Kathmandu in 1952 soon after an attempted coup 
to assist in correcting discipline problems and organizational defects. 
With a staff of 100 personnel commanded by a major general, the 
mission implemented significant reforms in training, recruitment, 
promotion, and virtually every aspect of military life. In 1958 the 
Indian Military Mission was replaced by the Indian Military Train- 
ing and Advisory Group consisting of twenty officers. This group 
functioned in Kathmandu until 1963, when it was renamed the 
Military Liaison Group and its responsibilities were reduced to liai- 
son work on common defense problems. Nepalese nationalists com- 
plained, however, that the army's dependence on India for military 
training and direction was repugnant. Following significant rifts 
in Indo-Nepalese relations in the late 1960s, the Indian advisory 
group closed its offices for good (see Relations with India, ch. 4). 
The only Indian military presence in Nepal in 1991 consisted of 
a defense attache at the high commission in Kathmandu and Gur- 
kha recruitment centers located at Pokhara and Dharan. The only 
other countries with defense attaches posted to Kathmandu in 1991 
were the United States, Britain, China, the Soviet Union, and 
Pakistan. 

Although Nepalese officers still were sent to India for a variety 
of advanced or specialized courses as of 1991, basic officer train- 
ing for "gentleman" recruits was conducted at the Royal Nepal 



220 



Nepal: National Security 



Military Academy at Kharipati near Kathmandu. Modeled after 
the Indian Military Academy and Sandhurst, the academy con- 
ducted a fifteen-month training course. Classes, usually number- 
ing between 50 and 100 students, were divided into four cadet 
companies named after famous Nepalese military victories. At the 
conclusion of training, newly commissioned second lieutenants were 
assigned to units according to their specialties and the needs of the 
army. 

Those officers who showed promise for promotion to higher com- 
mands competed throughout their careers for highly prized train- 
ing assignments in the United States, Britain, Germany, India, 
Pakistan, and Bangladesh. Nepalese officers were not known ever 
to have received military training in the Soviet Union or in East 
European countries. A handful of army personnel may have gone 
to China in 1988, however, to train on the air defense guns pur- 
chased by Nepal at that time. Chinese military advisers have never 
been posted to Nepal, owing, in part, to Kathmandu 's awareness 
of India's extreme sensitivity over Chinese activities in the coun- 
try (see Relations with China, ch. 4). 

Over the years, Nepalese officers have attended the United States 
Army Command and Staff College at Fort Leavenworth, Kansas; 
the Army War College at Carlisle Barracks, Pennsylvania; and a 
number of other military schools and institutions. Most expenses 
for this training were covered by funds appropriated under the In- 
ternational Military Education Training (IMET) program. The 
program has been open to Nepalese officers since 1947, when Nepal 
and the United States exchanged diplomatic recognition. 

Rank Structure and Insignia 

Royal Nepal Army rank structure was, like most other aspects 
of military life, a blending of British, Indian, and Nepalese prac- 
tices. Except for honorary military titles, most commissioned officer 
ranks were the same as their United States and British equivalents. 
Exceptions included the tides field marshal (equivalent to the United 
States general of the armies) and colonel in chief of the army. As 
of 1991 , Nir Shamsher Jang Bahadur Rana was the only field mar- 
shal; Crown Prince Dipendra Bir Bikram Shah Dev was the colonel 
in chief. Nepal's senior officer corps in 1991 numbered one gener- 
al, five major generals, and about twenty-one brigadier generals. 
Officers' insignia displayed a variety of symbols; all, however, bore 
the emblem of the crossed kukri that identified Gurkha soldiers the 
world over. 

Between the commissioned officers and the enlisted ranks was 
a separate category of junior commissioned officers QCOs), who 



221 



Nepal and Bhutan: Country Studies 




222 



Nepal: National Security 



acted as a bridge between the officers and their troops. Adapted 
from the colonial commissioned officer system of the old British 
Indian Army, JCOs were roughly equivalent to United States Army 
warrant officers (although few JCOs were skilled technicians). JCOs 
were selected from noncommissioned officer ranks and advanced 
through a three-tier ranking system (jamadar, subedar, and subedar 
major). At the bottom of the military hierarchy were the "other 
ranks" (commonly referred to as ORs). These included several 
ranks of noncommissioned officers, sepahis (or, the Anglo-Indian 
corruption, "sepoys") and jawans, who together made up the bulk 
of the army (see fig. 12). Although the lowest army ranks had their 
equivalents in the Brigade of Gurkhas and the colonial successor 
armies of India, Pakistan, and Bangladesh, the Royal Nepalese 
Army maintained a distinct nomenclature not found anywhere else. 

Gurkhas Serving Abroad 

Despite Nepalese sensitivities over domestic and foreign criti- 
cism of allowing foreign armies to recruit "mercenaries" in Nepal, 
various Gurkha units continued to serve outside Nepal in the ear- 
ly 1990s. The only Nepalese-controlled unit abroad, however, was 
the Nepalese army battalion posted to the United Nations Interim 
Force in Lebanon. Small Nepalese contingents also have served 
in United Nations peacekeeping forces in Korea and the Congo 
(now Zaire). Unlike neighboring states, such as Bangladesh and 
Pakistan, Nepal did not contribute military personnel to the inter- 
national coalition that defeated Iraqi forces and liberated Kuwait 
in the 1991 Operation Desert Storm campaign. 

From Kathmandu's perspective, the military and economic ad- 
vantages accruing from foreign recruitment of Gurkhas far out- 
weighed occasional criticism. Militarily, the presence of over 
100,000 trained and disciplined Gurkha veterans was a valuable 
human resource. Service abroad widened their horizons, and mili- 
tary training and discipline taught them not only how to obey, but 
also how to give orders. Many Gurkhas gained specialized skills 
in communications and engineering units, and most have had some 
training in such practical subjects as sanitation, hygiene, agricul- 
ture, and the building trades. The Gurkhas also played an impor- 
tant role in the country's economy. The cash flow derived from 
annual pensions, remittances to families, or monies taken home 
in a lump sum by discharged veterans or by service personnel on 
leave represented a major source of the country's foreign exchange. 
Remittances and pensions contributed by British Gurkhas were es- 
timated in 1991 to total over US$60 million annually, or over twice 
the value of Britain's annual foreign aid commitment to Nepal. 



223 



Nepal and Bhutan: Country Studies 

Pensions from Indian Gurkhas also represented a major revenue 
source. Gurkhas returning from duty in Hong Kong also were able 
legally to import a few kilograms of gold bullion duty free. 

In some Gurung villages, about half of the families had one or 
more pensioners. For many families, hope of financial solvency 
rested on their sons returning home with a substantial sum saved 
during a three-year enlistment. Such income also directly benefit- 
ed the economy, as money circulated in the purchase of consumer 
goods, the payment of debts, the purchase of land, or investment 
in small commercial ventures. 

The British Brigade of Gurkhas was the most famous unit. By 
1991 the brigade comprised about 8,000 soldiers — five infantry bat- 
talions and supporting units — most of whom were posted to Hong 
Kong. There was considerable uncertainty over the brigade's fu- 
ture, however. Cutbacks in British military commitments in Eu- 
rope, coupled with plans to cede control of Hong Kong to China 
in 1997, left the brigade's future in doubt. Under a proposed 
scheme, the brigade would be based in Britain and would induct 
fewer than 150 Nepalese recruits annually. An informal lobby of 
former Gurkha regimental commanders exerted tremendous po- 
litical pressure whenever the British Parliament considered changes 
in Gurkha force structure. Although some Britons considered the 
existence of foreign-recruited units anachronistic in a modern 
sophisticated army, much of the British public and defense estab- 
lishment harbored strong sentimental attachments to the Brigade 
of Gurkhas. 

As of 1991, there were more than 100,000 Gurkhas serving in 
over forty Indian infantry battalions and elsewhere in the Indian 
Army. Their pay and pensions, though not as generous as British 
benefits, also represented a significant contribution to the Nepa- 
lese economy. Almost all of the Indian Gurkhas served in ethni- 
cally distinct regiments commanded by non-Gurkha officers. In 
addition, about twenty-five battalions of Assam Rifles, a special- 
ized paramilitary force descended from the old British unit of the 
same name, were staffed almost exclusively by Gurkha recruits. 
Gurkhas played no appreciable role in Indian services other than 
the army and paramilitary forces. As during the British Raj, suc- 
cessive Indian governments called upon Gurkha regiments on 
numerous occasions to put down domestic disturbances that were 
beyond the control of local police. Ethnically homogeneous Gur- 
kha units often were considered more reliable than mixed units that 
might be tempted to side with ethnic kin embroiled in a dispute. 

Singapore has maintained a small Gurkha contingent attached 
to the Singapore Police since the early 1950s. Composed entirely 



224 



Nepal: National Security 

of British Gurkha veterans and commanded by British officers, the 
contingent performed guard duties and assisted the local police in 
routine security chores. The sultan of Brunei also maintained a 
900-person Gurkha Reserve Unit equipped with light infantry 
weapons. As with the Singapore unit, the Brunei Gurkhas all were 
British Army veterans. The unit functioned primarily as a praetori- 
an guard that protected the sultan — reputedly the richest man in 
the world — against any internal or external threat that might arise. 

Military Justice 

The military court system consisted basically of courts-martial, 
similar in composition and jurisdiction to those of the Indian Army. 
Courts-martial were of four kinds: general, district, summary gener- 
al, and summary. A general court-martial was convened by the 
king or an officer deputized by him. It consisted of five or more 
officers, each with three or more years of commissioned service. 
Attending the court, but not a member, was an officer of the Depart- 
ment of the Judge Advocate General or an officer designated by 
the judge advocate general. The court was authorized to impose 
any sentence prescribed by army regulations. A district court- 
martial consisted of three or more officers, each with a minimum 
of three years of commissioned service, and could impose any sen- 
tence other than the death penalty. A summary general court- 
martial consisted of three or more officers, with no requirement 
as to the length of their commissioned service. A summary court- 
martial was convened by an officer of the rank of battalion com- 
mander or above, who acted as the court. 

The death sentence, banned in civilian cases under the 1990 con- 
stitution, was imposed for treason, mutiny, desertion, inciting panic, 
and surrender of troops, arms, or garrisons to the enemy with a 
finding of cowardice. Authorized punishment for dereliction of mili- 
tary duties or regulations in time of war generally was twice as se- 
vere as that prescribed for the same offense committed in peacetime. 
Contact with foreign diplomats and attaches, however innocuous, 
was strictly forbidden. A few high-ranking officers in army head- 
quarters were allowed to interact with foreigners but only on offi- 
cial matters. Failure to observe this rule could damage a soldier's 
promotion prospects or lead to disciplinary action. 

The disciplinary powers of officers and noncommissioned officers 
were more extensive than in the United States military service. Unit 
commanders could impose up to thirty days' confinement in pris- 
on or restriction to barracks. The most common forms of compa- 
ny punishment included extra guard duty, suspension from duty 
or from supervisory assignments, fines of up to fourteen days' pay, 



225 



Nepal and Bhutan: Country Studies 

detention of pay until a financial or property loss was compensat- 
ed, reprimand, and warning. Junior commanders could demote 
officers with the rank of hudda (sergeant) or lower. 

The Police System 

Until the middle of the nineteenth century, police and judicial 
functions in many areas were in the hands of local princes (rajas), 
who were virtually autonomous rulers of their people. The central 
government ruled outside the capital and delegated authority to 
the local governors, later known as bada hakim, who in turn de- 
pended on village heads and village councils to maintain order in 
their respective communities. The scope and intensity of police and 
judicial activities varied largely with local leaders and customs. Caste 
status and standing with the authorities also gready influenced court 
judgments and police attitudes. Efforts by the central government 
to enlarge its authority over local affairs generally were regarded 
by the isolated tribal groups as encroachments on their traditional 
independence. Thus, old practices tended to persist in the hinter- 
land despite changes in the government and government policy in 
Kathmandu. 

The Ranas did not establish a nationwide police system, although 
Prime Minister Chandra Shamsher Rana, who served from 1901 
to 1929, somewhat modernized the police forces in Kathmandu, 
other large towns, and some parts of the Tarai. Police functions 
in outlying areas, because of the relative isolation of most com- 
munities, generally were limited to the maintenance of order by 
small detachments of the centrally controlled police personnel sup- 
plemented by a few locally recruited police. 

Following the anti-Rana revolt that began in 1950, the govern- 
ment began to modernize the police system and improve its effec- 
tiveness. Assistance was requested from India, and an Indian police 
official was sent to Kathmandu to help reorganize the police force. 
Some Nepalese police were sent to police training academies in 
India. 

Nepal's police system in the early 1990s owed its modern ori- 
gins to the Nepal Police Act, enacted by King Mahendra in 1955. 
Besides denning police duties and functions, the act effected a gener- 
al reduction in the size of the police force and a complete reorgani- 
zation of its administrative structure along Indian lines. 

In accordance with the Nepal Police Act, Nepal was divided into 
three geographical zones (sometimes called "ranges" in Indian 
parlance). Each of the zonal headquarters, under a deputy inspec- 
tor general of police, was responsible for several subsections com- 
posed of four or five police districts operating under a superintendent 



226 



Nepal: National Security 



of police. A district superintendent was in charge of the police sta- 
tions in his area. Each station normally was supervised by a head 
constable who was in charge of several constables performing ba- 
sic police functions, such as crime investigations and arrests. Each 
constable was customarily responsible for three or four villages. 

Under the constitution, law and order at the district level con- 
tinues to be the responsibility of the chief district officer, who is 
selected from among senior cadre civil servants under the Minis- 
try of Home Affairs. Other district administrative officers work 
in coordination with the chief district officer. Despite the abolition 
of the panchayat (see Glossary) system, no significantly different al- 
ternative system had emerged as of mid- 1991 . During the interim, 
village and municipal development committees, consisting of per- 
sons nominated by chief district officers, replaced village and town 
panchayat, which had exercised administrative and some quasi- 
judicial functions at the local level. At the local level, maintenance 
of law and order is the responsibility of the chowki hawaldar (local 
police officer), who reports to the thana (station inspector). All lo- 
cal police officers work under the supervision of the chief district 
officer. 

At the apex of the system was the Nepalese Police Force, cen- 
trally administered by the Ministry of Home Affairs. The Central 
Police Headquarters, commanded by the inspector general of the 
Nepalese Police Force, had a criminal investigation division; in- 
telligence, counter-intelligence, motor transport and radio sections; 
a traffic policy branch; and a central training center. 

The police system formerly had been overseen by the king and 
his advisers, with little or no public accountability. Under the 
partyless panchayat system, the public generally regarded the police 
as instruments of the king and his local political supporters. Nepalese 
police were poorly paid and poorly trained, even by Nepalese 
standards. 

The administration of justice was often arbitrary and, accord- 
ing to international human rights organization, brutal. A 1989 Unit- 
ed States congressional report on human rights in Nepal noted 
"continuing reports of beatings and other brutal treatment of 
prisoners by police officials, particularly in rural areas." The report 
also noted that arbitrary arrest and detention were ''com- 
mon. . . . Because communication links in Nepal are limited, local 
officials have a great deal of autonomy and exercise wide discre- 
tion in handling law and order issues." 

Although the Nepalese police system in the early 1990s still was 
generally regarded as inefficient and corrupt, most observers believed 
that Nepal's transition from a feudal monarchy to a parliamentary 



227 



Nepal and Bhutan: Country Studies 

democracy had greatly improved the chances for police reform and 
the curtailing of human rights abuses by the police. As in the case 
of the army, police loyalties were severely tested during the 1990 
nationwide prodemocracy movement. Although acting under the 
guidance of the palace, the police generally did not take sides in 
the political standoff. Even though police excesses occurred, force 
discipline did not break down. 

Shortly after his election to office, Prime Minister G.P. Koirala 
pledged that improving law and order and protecting human rights 
would be his administration's top priorities. Koirala' s critics not- 
ed, however, that his tough law-and-order stance was intended less 
to promote human rights reforms and more as a political signal 
to communist elements threatening to mount street protests against 
the new democratic government. In April 1991, Nepal acceded to 
the International Covenant on Civil and Political Rights and the 
Convention Against Torture and Other Cruel, Inhuman, or De- 
grading Treatment. 

State-supported penal institutions, including the central prison 
in Kathmandu and jails in most district capitals, had long been 
targets of considerable criticism on the part of human rights ac- 
tivists. According to various reports on human rights, prison con- 
ditions were unsanitary and degrading. Prisoners were segregated 
into three categories. Class C prisons, the lowest and most numerous 
type of prison, were populated with common criminals who often 
were subjected to beatings and abuse at the hands of police jailers. 
The higher prison categories were reserved for persons with polit- 
ical connections or higher social status. Conditions in these facili- 
ties generally were better than in Class C prisons. Women were 
incarcerated separately from men although in equally poor condi- 
tions. Mentally ill persons often were placed in jails because most 
communities lacked other, more appropriate, long-term care fa- 
cilities. In an effort to address some of these problems, the Koira- 
la government shifted prison administration and management from 
the police to the Ministry of Home Affairs shortly after assuming 
office in 1990. 

The Judicial System 

The Legal Code 

The judicial system initiated under the Ranas, despite some limited 
reforms, remained traditional in character in the early 1990s. The 
Muluki Ain of 1854, the legal code introduced by the first Rana 
prime minister, Jang Bahadur Rana, combined ancient Hindu 
sanctions and customary law and common laws modeled on the 



228 



Nepal: National Security 



British and Indian codes with the rules of behavior that had evolved 
over the centuries among the Newars in the Kathmandu Valley 
(see The Kot Massacre, ch. 1). 

The Muluki Ain was amended several times and was complete- 
ly revised in 1963. Over the years, the Muluki Ain blended royal 
edicts, proclamations, and piecemeal legislation. The entire cor- 
pus of law was consolidated in a compilation called the Ain San- 
graha. Customs were applied in the absence of legislative provisions 
or judicial procedures. 

The revised code sought to promote social harmony and declared 
all persons theoretically equal in the eyes of the law, thus ending 
legal discrimination based on caste, creed, and sex. The code grant- 
ed the right to divorce, permitted intercaste marriages, and 
abolished the laws sanctioning untouchability. These provisions 
were drafted at the behest of the king. A uniform family law was 
applicable to all religious communities and was contained in the 
Muluki Ain. When the code was silent, however, the custom of 
the particular community applied. The code remained the exist- 
ing substantive law in 1991. 

The Court System 

The official text of the Muluki Ain was published in Nepali; few 
statutes were available in English. Statutes were cited by the years 
of enactment. The Nepal Raj Patra, the government gazette, issued 
at irregular intervals, published all new legislation. Official texts 
of Supreme Court decisions were published monthly in the Nepal 
Kanoon Patriki, the Nepalese law journal, which also contained the 
official texts of new legislation and articles on legal topics. The Nepal 
Act Series, published by the Law Book Management Board in Kath- 
mandu, by arrangement with government ministries, was a com- 
pilation of all Nepalese laws and statutes. 

Under the vague instrument of the Muluki Ain prior to its 1963 
revision, magistrates and justices had wide latitude in deciding cases 
according to their own interpretations. There was a motive for cau- 
tion, however, in the provision that if a higher court reversed the 
decision of a lower court, the magistrate of the lower court was 
liable to a fine, corporal punishment, or even execution. Court 
procedures varied greatly. The accuser was placed in jail along with 
the accused. Writs of habeas corpus were not issued. Prisoners often 
waited many months before trial. The onus of proof of innocence 
rested on the accused, who was tried without a jury. 

Under the rules, no one could be convicted of a criminal charge 
without a confession, but confessions were commonly extracted by 
torture. The Rana courts had both executive and judicial powers, 



229 



Nepal and Bhutan: Country Studies 

and the prime minister was the supreme judicial authority whose 
decision on a given case was final. 

Reforms enacted under the constitution of 1948 and in the first 
years following the 1 95 1 overthrow of Rana rule modernized many 
features of the feudal-based legal system. The prime minister was 
divested of judicial powers and no longer functioned as the highest 
court of appeal. The Supreme Court Act of 1952 established the 
Supreme Court as the highest judicial body, with powers and struc- 
ture corresponding generally to those of the Supreme Court of In- 
dia. Special traveling courts were organized and were sent into the 
districts to provide citizens easier access to the legal system. These 
courts were empowered to audit public accounts, hear complaints 
of all kinds, make arrests, hold trials, and impose sentences. An 
important step toward a unified judicial system came in 1956 with 
the establishment, mostly in the Tarai, of a series of district courts 
that heard civil and criminal cases. Appeals courts were set up in 
Kathmandu. The 1962 Panchayat Constitution stipulated that the 
king was solely responsible for appointing judges and providing 
judicial overview. 

Under the Panchayat Constitution, the court system was head- 
ed by the Supreme Court, composed of a chief justice, nine judges, 
and a small secretarial staff. Below the Supreme Court were four- 
teen zonal courts, which, in turn, oversaw seventy-five district courts 
throughout the country. All the lower courts had both civil and 
criminal jurisdiction. Although the judiciary technically was in- 
dependent, in practice the courts never were assertive in challeng- 
ing the king or his ministers. 

The constitution promulgated in 1990 reorganized the judiciary, 
reduced the king's judicial prerogatives, and made the system more 
responsive to elected officials. Under the new system, the king ap- 
pointed the chief justice of the Supreme Court and the other judges 
(no more than fourteen) of that court on the recommendation of 
the Judicial Council. Below the Supreme Court, the constitution 
established fifty-four appellate courts and numerous district courts. 
The judges of the appellate and district courts also were appointed 
by the king on the recommendation of the Judicial Council. The 
Judicial Council, established in the wake of the prodemocracy move- 
ment and incorporated into the constitution, monitored the court 
system's performance and advised the king and his elected govern- 
ment on judicial matters and appointments. Council membership 
consisted of the chief justice of the Supreme Court, the minister 
of justice, the two most senior judges of the Supreme Court, and 
a distinguished judicial scholar. All lower court decisions, includ- 
ing acquittals, were subject to appeal. The Supreme Court was 



230 



Nepal: National Security 



the court of last resort, but the king retained the right to grant 
pardons and suspend, commute, or remit any sentence levied by 
any court. 

The new judicial system still was in its infancy as of 1991 . Some 
observers noted that judicial appointments had remained a source 
of patronage by which the elected government rewarded its sup- 
porters. Others feared that Nepal lacked the legal resources to staff 
an expanding and modern judicial system. The growing backlog 
of legal cases, many of them initiated during the 1990 prodemocracy 
upheaval, also threatened to overwhelm the system. Despite these 
drawbacks, however, most observers of the legal system felt the 
changes were forward-looking and progressive. 

The Security Environment 

Throughout its modern existence, Nepalese foreign policy ar- 
chitects and defense planners have had to perform a precarious 
balancing act to ensure the nation's survival. As a protective mea- 
sure, foreign troops were not allowed to be based in Nepal. This 
restriction remained in force as of 1991. Neither China nor India 
harbored territorial ambitions in Nepal; indeed, unlike many other 
land boundaries in South Asia, Nepal's frontiers were regarded 
by India and China as valid international boundaries. Nor did 
Nepal possess any natural resources or other economic assets that 
were coveted by either neighbor. Nevertheless, the country's geo- 
strategic position between China's restive Tibetan population and 
the Indian heartland placed it in a vulnerable position. 

Terrain, weather, and logistic considerations presented special 
problems for defense planners and for any foreign forces that might 
have to operate in the country. Ground units had to be equipped 
to cope with climatic extremes of monsoonal rains and drought as 
well as jungle heat and high-altitude cold. Nepal's terrain ranged 
from the world's highest and most deeply gorged mountains to the 
swamps and dense jungles of the Tarai (see The Land, ch. 2). 
Troops operating in Nepal had ample cover, but cross-country 
movement was extremely difficult. The use of motor transport — 
often in short supply in the Nepalese army — was impractical ex- 
cept for the short stretches where roads existed. Further, many roads 
and bridges were unsuitable for heavy military vehicles. In the 
higher elevations, supplies were moved by pack animals or human 
porters. Throughout the country, the terrain lent itself to the am- 
bush and hit-and-run tactics that Nepalese units would employ dur- 
ing a partisan struggle. Thus, local inhabitants familiar with the 
countryside and accustomed to its severe climatic conditions would 
have a decided tactical advantage over invading forces. 



231 



Nepal and Bhutan: Country Studies 

In the lowlands, ground movement was virtually impossible dur- 
ing the wet season because of extensive flooding, washed-out 
bridges, and deep mud. In the mountains, troops had to march 
single file over precarious trails subject to washouts, landslides, 
avalanches of boulders, ice, and snow. Stream crossing points often 
were limited to fords and unstable suspension bridges. Supply drops 
by helicopters and airplanes — both critically short in the Nepalese 
army — could be made only in favorable weather and in the restrict- 
ed areas accessible to troops. Tribhuvan International Airport out- 
side Kathmandu was the country's only airfield with sufficient 
capacity for large-scale military airlift and resupply operations. The 
airport's refueling capacity and aircraft maintenance facilities were 
marginal, however. Only five of Nepal's thirty-eight airfields had 
permanent-surface runways. 

Tropical diseases, such as malaria, and the danger of suffering 
pulmonary edema and frostbite during high- altitude operations fur- 
ther inhibited force sustainability. Medical equipment and supplies, 
most of which were imported from India, also were in short sup- 
ply. Water supplies, although usually available in all but the most 
mountainous regions, often were contaminated and unfit for hu- 
man consumption unless treated. Although army medical services 
were adequate for routine peacetime health care of soldiers and 
their families, sustained combat operations probably would over- 
whelm the country's underdeveloped health services. The army's 
premier medical facility, Birendra Hospital, was located in Kath- 
mandu. As food production in most areas was barely sufficient to 
support the local population, wartime destruction of the agricul- 
tural infrastructure, particularly in the fertile Kathmandu Valley, 
would be likely to result in shortages and famine unless India or 
other foreign donors provided immediate emergency relief. 

India 

Although landlocked Nepal was surrounded by both India and 
China, the kingdom's geographic, economic, and cultural orien- 
tation was more closely linked to India. Whereas many Nepalese 
stressed the differences that defined Nepal's national existence, In- 
dia's policy makers tended to stress the similarities that bound the 
two countries together. According to New Delhi's perception, South 
Asia constituted an integral security unit in which India played 
the lead role. Many Nepalese resented this interpretation and ac- 
cused India of being insensitive to Nepal's status as an indepen- 
dent nation. 

Despite New Delhi's insistence that stable, independent neigh- 
bors were vital to India's security, many Nepalese regarded India 



232 



Nepal: National Security 



as a regional bully. Because of these differing attitudes, Nepal's 
relations with India oscillated considerably over the years, partic- 
ularly in matters relating to security. 

In a speech before Parliament in 1950, the Indian prime minister, 
Jawaharlal Nehru, summed up India's security concerns vis-a-vis 
Nepal. He stated: "From time immemorial, the Himalayas have 
provided us with magnificent frontiers. . . . We cannot allow that 
barrier to be penetrated, because it is also the principal barrier to 
India. Therefore, as much as we appreciate the independence of 
Nepal, we cannot allow anything to go wrong in Nepal or permit 
that barrier to be crossed or weakened, because that would be a 
risk to our own security." Nehru and his successors subsequently 
stated that any Chinese attack on Nepal would be regarded as ag- 
gression against India. 

In 1950 China forcibly annexed Tibet, which New Delhi regarded 
as a buffer zone shielding the subcontinent from real or potential 
Chinese incursions. Nepal thus came to play a much larger role 
in India's security calculations. Fearing that China might eventu- 
ally subvert or invade Nepal, India signed a Treaty of Peace and 
Friendship with the Rana regime in 1950. Although not a formal 
military alliance, the treaty required both parties to consult and 
"devise effective countermeasures" in the event of a security threat 
to either country. Nepal's inclusion in the Indian defense perimeter 
was made explicit by an exchange of secret letters — later made 
public — that accompanied the treaty, stating inter alia that "neither 
government shall tolerate any threat to the security of the other 
by a foreign aggressor." To assuage Nepalese fears of Indian domi- 
nation, the treaty also stipulated that Indian forces could be in- 
troduced into the country only at the invitation of the Nepalese 
government. The two sides simultaneously signed a trade and transit 
agreement that extended reciprocal rights with regard to bilateral 
trade and residential arrangements as well as transshipment of 
Nepalese goods through India. 

In 1952 the Indian Military Mission arrived in Kathmandu to 
reorganize Nepal's armed forces and bring the kingdom's defenses 
more in line with India's security requirements. In implementing 
changes, Nepal drastically reduced the size of its postwar army and 
revamped its training and organization along Indian lines. Indian 
advisers also played key roles in training the civil service and police 
force. Many Nepalese — military officers and civil servants, in 
particular — were outraged by India's actions, which they saw as 
an insult to national self-respect. Indian influence was further 
strengthened, however, by the cooperation of both countries' mili- 
taries on several occasions in the 1950s, when at Nepal's request 



233 



Nepal and Bhutan: Country Studies 

Indian troops helped quell disturbances near their common bound- 
ary. As Sino-Indian tensions mounted in the late 1950s, Indian 
soldiers and technicians assisted in staffing some of the checkposts 
on the frontier with Tibet. Despite close military ties, Nepal, 
however, has never allowed garrisoning of Indian troops or joint 
military exercises in the country. 

In 1962 Indian and Chinese forces fought a brief but decisive 
war over desolate stretches of their disputed frontier. India's unpre- 
pared forces suffered a humiliating defeat, despite the fact that Chi- 
na unilaterally withdrew its forces after several weeks of heavy 
fighting. Although Nepal did not become embroiled in the fight- 
ing and both belligerents respected the kingdom's territorial in- 
tegrity, the war reinforced Nepalese perceptions of their country's 
perilous role as a Sino-Indian security buffer. 

Because of India's growing influence and Nepal's correspond- 
ing dependence on India, international diplomacy has always been 
a vital element of Nepal's survival strategy. Nepal was an active 
participant and a voice of moderation in the United Nations (UN) 
and the Nonaligned Movement, although the viability of the lat- 
ter organization was in doubt after the end of the Cold War (see 
International and Regional Organizations, ch. 4). In addition, 
Nepal firmly supported the South Asian Association for Regional 
Cooperation (SAARC — see Glossary) headquartered in Kathman- 
du. SAARC eschewed any role in regional security because the 
threats perceived by Nepal and the other small states of the region 
were often at variance with those perceived by India. 

In 1975 King Birendra proposed that the UN declare Nepal a 
zone of peace, where military competition would be off-limits. In 
Birendra' s view, the proposal symbolized Nepal's desire to main- 
tain cordial relations with both its neighbors by placing interna- 
tionally sanctioned restrictions on the use of military force (see 
Foreign Policy, ch. 4). 

Nepalese-Indian relations underwent major jolts over a protracted 
period starting in 1988. In June of that year, Birendra concluded 
a secret arms purchase with China, whereby Beijing would supply 
obsolescent air defense artillery at bargain prices. India probably 
learned of the deal within days or weeks of the agreement and pro- 
tested vigorously that Birendra's action had violated the spirit, if 
not the letter, of the 1950 treaty. Although the appearance of a 
limited number of vintage air defense weapons hardly represented 
a threat to Indian Air Force contingency plans, India interpreted the 
sale as a dangerous precedent that could not go unchallenged. As 
bilateral tensions mounted, India added other complaints regarding 
Nepal's supposed insensitivity to India's vital interests. Birendra, 



234 



Nepal: National Security 



capitalizing on nationalistic fervor, was intransigent and insisted 
that Nepal had the sovereign right to determine its own defense 
requirements. He also pointed out that Nepal's use of air defense 
assets against India would never arise as long as Indian fighters 
respected Nepalese air space; New Delhi countered that the only 
plausible use for the weapons was against India. 

In March 1989, the Nepal-India trade and transit agreement 
came up for renewal. India's prime minister, Rajiv Gandhi, refused 
to extend the agreement unless Nepal agreed to meet India's com- 
mercial and defense concerns. After both sides refused to back down, 
India allowed the agreement to lapse and closed thirteen of the 
fifteen border checkposts that regulated most of Nepal's trade with 
the outside world. The blockade was a severe blow to Nepal. The 
Chinese rail line in Tibet ended 800 kilometers short of the Nepa- 
lese border, and the road linking Kathmandu and Tibet was closed 
much of the year by avalanches and monsoon landslides. The Nepa- 
lese army was pressed into action to keep Nepal's section of the 
road open to the extent possible. Pakistan and Bangladesh were 
hardly in a position to supply major assistance because their only 
land routes to Nepal traversed India. The Soviet Union, the United 
States, and other Western powers quiedy declined to take sides and 
urged India and Nepal to return to the bargaining table. 

In the final analysis, the dispute underscored a central geopolit- 
ical reality: landlocked Nepal did not have the military, diplomat- 
ic, or economic clout to withstand an Indian blockade as long as 
the government in New Delhi was willing to risk international op- 
probrium and press its case against the kingdom. Many Nepalese 
saw New Delhi's actions as "punishment" for Birendra's show of 
independence and as a manifestation of India's supposed policy 
of isolating and subjugating its smaller neighbors. Some Nepalese 
observers, however, criticized Birendra's handling of the dispute, 
arguing that the king harnessed popular fervor against India to rally 
patriotic support behind the palace. 

Some fifteen months of economic dislocations and diplomatic 
recriminations placed heavy pressure on both sides to halt the slide 
in relations. Finally, both sides reaffirmed the 1950 treaty, and 
Kathmandu agreed not to purchase defense items abroad without 
consulting New Delhi. Birendra requested that China stop deliv- 
ery of a final shipment of air defense equipment. Relations gradu- 
ally returned to normal and improved significantly after Nepal's 
democratically elected government assumed office in May 1 99 1 . 
The dispute convinced many Nepalese, however, that India had 
the capacity and will to pressure small neighbors in pursuit of its 



235 



Nepal and Bhutan: Country Studies 

foreign policy objectives — a message that New Delhi clearly intend- 
ed to convey to Beijing. 

China 

Nepal's security relations with China dated at least as far back 
as the eighteenth century. In the nineteenth century, Nepal gained 
the upper hand over Tibet, then a semiautonomous vassal state 
of China. In the latter part of the twentieth century, however, 
Nepal's dealings with China generally had been kept on an even 
keel, except when India expressed strong disapproval, as in the 
aftermath of China's 1988 sale of air defense weapons to Nepal. 

The earliest defense pact with China was the Sino-Nepalese 
Treaty of 1792, signed after the Chinese had defeated the forces 
of the Gorkha kingdom at Nawakot, some seven kilometers north- 
west of modern Kathmandu. Under this treaty, the signatories 
agreed that they would regard China as a "father" to them and 
affirmed their understanding that China would come to the aid 
of Nepal should it ever be invaded by a foreign power — although 
no such assistance occurred during the Anglo-Nepalese War of 
1814-16 (see The Enclosing of Nepal, ch. 1). In the mid-nineteenth 
century, however, forces from the kingdom of Gorkha were on the 
move northward. The Nepalese-Tibetan Treaty of Thapathali, 
signed in 1856 at the conclusion of a successful two-year campaign 
in Tibet, stipulated that Tibet pay annual tribute to Nepal and 
grant certain extraterritorial rights to Nepalese traders. It also 
pledged a mutual policy of nonaggression, and China agreed to 
come to Nepal's assistance should Nepal be invaded by the forces 
of "any other prince." A century later, in September 1956, the 
agreement was replaced by a treaty of amity and commerce with 
China's new communist regime, ending Nepal's tributary income 
and extraterritorial privileges. 

Although China offered to sign nonaggression or mutual defense 
pacts with Nepal, the kingdom always turned down the offers in 
deference to Indian sensitivities. In the 1950s, Nepal's anticom- 
munist rulers, spurred on by Indian advisers, regarded China as 
a potential threat and enacted various military reforms and laws 
to combat Chinese propaganda and subversion. In 1961 King Ma- 
hendra visited Beijing and signed an agreement to construct a high- 
way, named the Arniko Highway, from Kathmandu to Kodari on 
the Tibetan border. As of 1991, this highway remained the only 
major artery linking the two countries. Nepal generally preferred 
to keep relations with China low-key to avoid offending India. The 
1988 decision to purchase Chinese air defense weapons was a glaring 
exception to this rule. 



236 



Royal Nepal Army 
soldier at the gate 
of the old 
royal palace, 
Kathmandu 
Courtesy 
Harvey Follender 




Internal Security Considerations 

Nepalese police, backed from time to time by the army, combat 
routine crimes in addition to monitoring numerous political strikes 
and demonstrations. The incidence of organized political violence was 
low, however. Nepal was not a fertile breeding ground for interna- 
tional terrorism because most political violence was committed by 
Nepalese dissidents to further their own domestic political agendas. 

In the mid-1980s, small antimonarchist and communist groups 
conducted a series of bombings in the Kathmandu Valley to drama- 
tize their opposition to Birendra's rule. In June 1984, clandestine 
Maoist bands such as the Samyuktha Mukti Bahini (Socialist Liber- 
ation Army), the Democratic Front, and the United Liberation 
Torch Bearers mounted a campaign of bombings and assassina- 
tions intended to spark a revolution. Their actions had the oppo- 
site effect, however, as moderate opposition politicians condemned 
the violence and rallied around the king. The opposition civil dis- 
obedience campaign was called off, and the Rashtriya Panchayat 
passed a stringent antiterrorist ordinance to put down the threat. 
By August 1984, over 1,000 suspected terrorists and sympathizers 
were imprisoned under provisions of antiterrorist legislation promul- 
gated by the king. 

The following year, another bombing in downtown Kathmandu 
killed eight persons and wounded twenty-two others. The sensational 



237 



Nepal and Bhutan: Country Studies 

crime was perpetrated by the Jan Morcha (People's Front), a Tarai- 
based antimonarchist group with ties to political thugs in the Indi- 
an border states of Uttar Pradesh and Bihar. Several Jan Morcha 
leaders who fled to India were convicted of the bombing in absen- 
tia. In June 1991, following the installation of the Nepali Congress 
Party government, King Birendra pardoned the exiled terrorists 
as a gesture of political goodwill. 

The ethnic tensions that spilled across Nepal's international 
boundaries also posed security and foreign policy problems. In 1987 
the Nepalese minority residing in the mountainous northern dis- 
tricts of the Indian state of West Bengal mounted a violent agita- 
tion demanding statehood within the Indian union for Indian 
citizens of Nepalese origins. The standard bearer of the campaign 
was the Gorkha National Liberation Front led by Subhas Ghis- 
ing, a former noncommissioned officer in an Indian Gurkha regi- 
ment. The communist state government of West Bengal complained 
of Nepalese collusion with the agitators after Ghising openly solicited 
Kathmandu's support and called on Gurkhas in the Indian Army 
to back the demand for a separate "Gorkhaland." The situation 
worsened when Indian police crossed the Nepalese border while 
pursuing Gurkha militants. Although Kathmandu probably was 
sympathetic to the plight of the Nepalese minority, any appear- 
ance of support for the statehood agitation was scrupulously avoided 
for fear of angering New Delhi. Official Nepalese support for the 
movement never was proven. By 1991 the Gorkhaland agitation 
had subsided after New Delhi, West Bengal, and Gurkha militants 
negotiated a political settlement that fell short of statehood. 

In the 1980s, some of the young, militant Nepalese population 
residing in the southern part of Bhutan began to complain of sys- 
tematic discrimination at the hands of the Bhutanese government. 
As many as 6,000 ethnic Nepalese refugees fled to Nepal. Because 
there were another 16,000 Nepalese refugees who had fled from 
Bhutan to India, the ethnic dispute in Bhutan threatened to be- 
come a transregional security problem involving all three states (see 
Political Developments, ch. 6). 

The strong communist showing in the 1991 election was a dis- 
turbing development from the perspective of Birendra and the army. 
The Nepali Congress Party, a longtime political and ideological 
foe of the communists, also harbored deep misgivings over com- 
munist political intentions. Many observers feared that the rela- 
tively open political environment would allow disciplined communist 
cadres to mount street protests, paralyze the government, and force 
a showdown with the king and the army. Army officers, most of 
whom rejected the antimonarchist platform of the communists, 



238 



Nepal: National Security 



invariably regarded the communists as a potential security menace 
and a threat to the throne. There was no evidence in late 1991 that 
the some twenty Nepalese communist factions then in existence 
commanded any appreciable support within the army rank-and-file. 

The Military in the Early 1990s 

In the early 1990s, the military retained its generally privileged 
position in society. Constitutional arrangements mandating an un- 
precedented degree of civilian control over national defense and 
military affairs still were being ironed out, however, and the coun- 
try's experiment in participatory democracy still was in an embry- 
onic stage. The Royal Nepal Army's position during the 1990 
prodemocracy campaign prompted many observers to predict that 
the military would willingly accept its role in the new constitution- 
al order. Other observers, noting possibilities of heightened politi- 
cal competition and strife in the kingdom, were not so sanguine. 
Nepal, however, has never experienced a military coup d'etat — 
although the 1960 palace coup by King Birendra was backed by 
the military. In sum, the military's position in society and its sub- 
servience to civilian authority was a continuing process, not a set- 
tled fact. 

There were calls from some political quarters, particularly radi- 
cal communists and a section of the intelligentsia, to abolish the 
monarchy, overhaul the military chain of command, slash the 
defense budget, and ban Indian and British military recruiting of 
Nepalese citizens. These objectives were not shared by the ruling 
Nepali Congress Party government, King Birendra, large sections 
of the Nepalese public, and the military itself — all of which voiced 
unequivocal opposition to any political attempts to radically alter 
traditional patterns of civil-military relations. By 1991 the Royal 
Nepal Army, long a bulwark of the monarchy, appeared to be ad- 
justing to the new requirements laid down by the constitution and 
the new democratically elected government. Most civilian politi- 
cians also recognized the value of maintaining a disciplined, relia- 
ble military that could enforce public order, symbolize the nation's 
independence, and allow the government to proceed with the 
monumental task of improving the economic well-being of its 
citizens. 

* * * 

There are numerous popular works detailing the history, traditions, 
and martial prowess of the Gurkhas. Among the more interesting 



239 



Nepal and Bhutan: Country Studies 

are such vintage publications as Francis Ivan Simms Tuker's Gor- 
kha: The Story of the Gurkhas of Nepal, Byron Farwell's The Gurkhas, 
and Robin Adshead's Gurkha: The Legendary Soldier. John Masters' s 
classic novel Bugles and a Tiger provides colorful insight into the 
Gurkha tradition. For insights into the British Indian Army from 
which the Royal Nepalese Army traces its origin, see Stephen P. 
Cohen's monograph, The Indian Army. 

Unfortunately, there is no comprehensive work on Nepal's army, 
as most publications deal with Gurkha regiments. Basic informa- 
tion on Nepal's order of battle can be obtained from the annual, 
The Military Balance; periodic articles in Far Eastern Economic Review, 
Asian Defence Journal, and India Today shed some light on Nepalese 
military and defense topics. Nepal's English-language press is gener- 
ally unenlightening on issues relating to defense; the government- 
controlled Rising Nepal is probably the best source for photos, com- 
mentaries, and a flavor of local opinion. Leo E. Rose's Nepal: Strategy 
for Survival ranks as the best source on Nepal's defense and foreign 
policy concerns, although it is somewhat dated. Historical docu- 
ments relating to Nepal's defense can be found in Documents on 
Nepal's Relations with India and China, 1949-1966, edited by A.S. 
Bhasin. Niranjan Koirala's "Nepal in 1990: End of an Era" in 
the February 1991 issue of Asian Survey provides a succinct sum- 
mary of the Indo-Nepalese trade and transit dispute. 

Annual updates on Nepal in Asian Survey and the Far Eastern 
Economic Review's Asia Yearbook are useful sources on Nepalese 
defense affairs; the Hoover Institution's annual Yearbook on Inter- 
national Communist Affairs details the activities of Nepalese com- 
munists; and the Department of State's annual Country Reports on 
Human Rights Practices for 1990 highlights Nepal's record and ac- 
complishments in human rights. A much darker view of the problem 
can be found in Amnesty International's Nepal: A Pattern of Human 
Rights Violations. (For further information and complete citations, 
see Bibliography.) 



240 



Table B. Bhutan: Chronology of Important Events 



Period Description 

ca. 500 B.C. State of Monyul established; continues to A.D. 600. 

ca. A.D. 630-640 Early Buddhist temples built. 

747 Guru Rimpoche visits Bhutan; founds Nyingmapa sect 

several years later. 

ca. 810 Independent monarchies develop. 

830s-840s Tibetan Buddhist religion and culture firmly estab- 

lished. 

eleventh century Bhutan occupied by Tibetan-Mongol military forces. 

1360s Gelugpa sect monks flee to Bhutan from Tibet. 

1616 Drukpa monk Ngawang Namgyal arrives from Tibet, 

seeking freedom from Dalai Lama. 

1629 First Westerners — Portuguese Jesuits — visit Bhutan. 

1629-47 Successive Tibetan invasions of Bhutan end in withdrawal 

or defeat. 

1651 Ngawang Namgyal dies; theocratic Buddhist state rules 

unified Bhutan (called Drukyul) and joint civil-reli- 
gious administration established; summer capital es- 
tablished at Thimphu, winter capital at Punakha. 
Drukpa subsect emerges as dominant religious force. 

1680s-1700 Bhutanese forces invade Sikkim. 

1714 Tibetan-Mongolian invasion thwarted. 

1728 Civil war accompanies struggle for succession struggle 

to throne. 

1730 Bhutan aids raja of Cooch Behar against Indian Mu- 

ghals. 

1760s Cooch Behar becomes de facto Bhutanese dependency; 

Assam Duars come under Bhutanese control. 

1770 Bhutan-Cooch Behar forces invade Sikkim. 

1772 Cooch Behar seeks protection from British East India 

Company. 

1772-73 British forces invade Bhutan. 

1774 Bhutan signs peace treaty with British East India 

Company. 



241 



Table B. — Continued 



Period Description 

1787 Boundary disputes plague Bhutanese-British Indian 

relations. 

1826-28 Border tensions between Bhutan and British increase 

after British seize Lower Assam, threaten Assam Duars. 

1834-35 British invade Bhutan. 

1841 British take control of Bhutanese portion of Assam Duars 

and begin annual compensation payments to Bhutan. 

1862 Bhutan raids Sikkim and Cooch Behar. 

1864 Civil war in Bhutan; British seek peace relationship 

with both sides. 

1864-65 Duar War waged between Britain and Bhutan. 

1865 Treaty of Sinchula signed; Bhutan Duars territories ceded 

to Britain in return for annual subsidy. 

1883-85 Period of civil war and rebellion leads to a united Bhutan 

under Ugyen Wangchuck. 

1904 Ugyen Wangchuck helps secure Anglo — Tibetan Conven- 

tion on behalf of Britain. 

1907 Theocracy ends; hereditary monarchy, with Ugyen Wang- 

chuck as Druk Gyalpo (Dragon King), established. 

1910 China invades Tibet, laying claim to Bhutan, Nepal, and 

Sikkim; Treaty of Punakha signed with Britain, stipulat- 
ing annual increase of stipend to Bhutan and Bhutan's 
control of own internal affairs. 

1926 Ugyen Wangchuck dies and is succeeded by Jigme Wang- 

chuck. 

1947 British rule of India and British association with Bhutan 

end. 

1949 Treaty of Friendship signed with India, essentially con- 

tinuing 1910 agreement with Britain. 

1952 Third Druk Gyalpo, Jigme Dorji Wangchuck, enthroned. 

1953 National Assembly established as part of government 

reform. 

1961 First five-year plan introduced. 

1962 Indian troops retreat through Bhutan during Sino-Indian 

border war. 

1964 Jigme Palden Dorji assassinated; factional politics emerge. 

1965 Assassination attempt on Jigme Dorji Wangchuck. 



242 



Table B. — Continued 



Period Description 
1966 Thimphu made year-round capital. 

1 968 Druk Gyalpo decrees that sovereign power is to reside in 

National Assembly. 

1971 Bhutan admitted to United Nations. 

1972 Fourth Druk Gyalpo, Jigme Singye Wangchuck, succeeds 

upon father's death. 

1974 New monetary system established separate from India's. 

1986 One thousand illegal foreign laborers — mostly Nepalese — 

expelled. 

1989 Unrest among Nepalese minority brings government 

efforts to ameliorate differences between ethnic com- 
munities as well as additional government restrictions. 

1990 Antigovernment terrorist activities initiated; ethnic Nepa- 

lese protesters in southern Bhutan clash with Royal 
Bhutan Army; violence and crime increase; citizen 
militias formed in progovernment communities. 

1991 Jigme Singye Wangchuck threatens to abdicate in face of 

hard-line opposition in National Assembly to his efforts 
to resolve ethnic unrest; cancels participation in an- 
nual three-day South Asian Association for Regional 
Cooperation (SAARC) conference because of unrest at 
home; attends abbreviated one-day SAARC session in 
Colombo, Sri Lanka. 



243 



Nepal and Bhutan: Country Studies 




244 



Bhutan: Country Profile 




Country 

Formal Name: Kingdom of Bhutan (Drukyul, literally, Land of 
the Thunder Dragon). 

Short Form: Bhutan. 

Term for Citizens: Bhutanese. 

Capital: Thimphu. 

Note: The Country Profile contains updated information as available. 



245 



Date of Unification: 1651, when theocratic Buddhist state of 
Drukyul was unified by Ngawang Namgyal. 

National Holiday: December 17, National Day, when Ugyen 
Wangchuck became first hereditary king. 

Geography 

Location and Size: Landlocked between China and India; total 
land area 44,500 square kilometers. 

Topography: Rugged, mountainous, snowcapped or glacier- 
covered terrain in north, part of Himalayas; high mountains in 
center, southern spurs of Himalayas; foothills and subtropical plains 
in south. Highest point Kulha Gangri (7,554 meters). Numerous, 
rapidly flowing, largely unnavigable rivers. 

Climate: Varies with altitude. Year-round snow in north, heavy 
monsoon rains in west, drier but temperate in central and eastern 
areas, humid and subtropical in south. 

Society 

Population: Estimates vary widely: 1,660,167 in July 1992 based 
on foreign estimates but more likely only 600,000, size given by 
Bhutanese government; annual growth rate 2 percent. About 45 
percent under age fifteen in late 1980s. In 1985, only 5 percent 
in urban areas; low population density — thirty-one persons per 
square kilometer for total area, higher average for habitable land. 

Ethnic Groups: Officially 72 percent of Bhutanese of Tibetan 
(Ngalop), Indo-Mongoloid (Sharchop), and aboriginal (Drokpa, 
Lepcha, and Doya) origin; 28 percent, Nepalese origin. Nepalese 
may constitute as much as 40 percent. 

Language: Dzongkha official national language using chhokey (Ti- 
betan script) for written expression; Ngalopkha (on which Dzong- 
kha is based) spoken in west; Sharchopkha in east; Nepali in south; 
English widely understood throughout school system. 

Religion: 70 percent Mahay ana Buddhists (predominantly Drupka 
subsect), approximately 25 percent Hindus, 5 percent Muslims. 
Indeterminate but small number of Bon adherents. 

Education: Noncompulsory, free eleven-year education (primary — 
grades one through five; junior high — grades six through eight; 



246 



upper- secondary schools — grades nine through eleven). Primary 
level attended by about 25 percent of school-age population; junior 
high and high schools attended by around 8 percent and 3 per- 
cent, respectively. In 1991 one junior college and two technical 
schools. Entire system supervised by Department of Education. 
Literacy rate 30 percent for males, 10 percent for females in early 
1990s. 

Health: In early 1980s, life expectancy 45.9 for women and men. 
Infant mortality rate 137 per 1,000 in 1990. Health-care system 
in late 1980s included twenty-nine general hospitals, forty-six dis- 
pensaries, and sixty-seven basic health units, four indigenous- 
medicine dispensaries, and fifteen malaria education centers with 
total capacity 932 beds. Severe shortage of health-care personnel: 
142 physicians and 678 paramedics in 1988. Gastrointestinal in- 
fections most common illness. 

Economy 

Salient Features: Underdeveloped economy with ties to India be- 
cause of geographic position and historical relationship. 
Predominantly agricultural; limited industrial activity; services — 
particularly related to tourism — growing part of economy. Develop- 
ment of hydroelectric capabilities for domestic use and export also 
increasingly important. Increasing domestic concern and interna- 
tional cooperation with respect to environmental protection and 
resource conservation. Development funding — major component 
in economic development. Once 100 percent from India, but in- 
creasingly from domestic sources, European countries, and inter- 
national organizations. Less than 1 percent of population involved 
in industrial work. 

Gross National Product (GNP): Nu3.9 billion (1988; Nu— 
ngultrum). Per capita GNP US$440. 

Gross Domestic Product (GDP): Nu3.4 billion (1988). 

Agriculture: Including fishing and forestry, 46.2 percent of GDP 
projected for 1991. Traditionally self-sufficient in food production; 
rice imports increased in late 1980s. About 87 percent of popula- 
tion involved in agriculture. Less than 6 percent of land cultiva- 
ble; most farms terraced or use illegal tsheri (shifting cultivation). 
Major crops corn and rice. Cash crops oranges, apples, and carda- 
mon. Livestock raised throughout country. Fish an important 
dietary supplement. Modest use of irrigation and fertilizers. Up 



247 



to 70 percent of country covered with forests; lumber industry about 
15 percent of GDP. 

Industry: 26.4 percent of GDP projected for 1991. Only 1 per- 
cent of population involved in industry and construction in late 
1980s. Basic industries: handicrafts, cement, food processing, wood 
milling, and distilling; 400 small-scale cottage and industrial units. 
Limestone for cement production major mining and quarrying 
product. Hydroelectric power major energy producer. 

Services: 29 percent of GDP projected for 1991. Most commer- 
cial services tourist-oriented plus domestic-oriented wholesale and 
retail trade. Tourism largest foreign-exchange earner (US$2 mil- 
lion in 1987). 

Resources: High-grade limestone and slate; marble, dolomite, and 
graphite; deposits of copper, gypsum, lead, tin, tungsten, zinc, coal, 
beryl, mica, pyrites, tufa, and talc. Abundant water for hydro- 
electric power sources. 

Foreign Trade: Principally with India. Total exports Nul.2 bil- 
lion in 1990, primarily electricity and processed raw materials. Total 
imports Nul.8 billion in 1990, primarily rice and manufactured 
goods. 

Balance of Payments: Early 1980s trade imbalance — imports 80 
percent of total trade — decreased as decade progressed. Exports 
represented 40 percent, imports 60 percent of total annual trade 
in 1990. 

Foreign Aid: Once 100 percent dependent on India for develop- 
ment funds and government revenue; since 1960s major inputs from 
Colombo Plan, World Bank, United Nations, and private sources, 
plus domestic contributions, decreased Indian aid to 27.5 percent 
(Nu2.6 billion) of total input in Sixth Development Plan (1987-92). 

Currency/Exchange Rate: Ngultrum (Nu). US$1 = Nul8.3 
(January 1991). Ngultrum on par with Indian rupee. 

Fiscal Year: July 1 to June 30. 

Transportation and Communications 

Roads: In 1989, 2,280 kilometers of roads, 77 percent paved. Most 
principal towns linked by surfaced road network in south; moun- 
tainous terrain in north makes transportation difficult. Nearly 7,000 
vehicles registered in 1988. Bus service major public transportation. 



248 



Airports: International facility at Paro, small airport at Yon- 
phula; helipads throughout country. Druk-Air service from Paro; 
five flights weekly to Bangkok, Calcutta, New Delhi, Dhaka, and 
Kathmandu. 

Telecommunications: Modern telecommunications link major 
towns; international microwave telephone service through satel- 
lite ground stations in Thimphu, Calcutta, and New Delhi. 

Government and Politics 

Government: World's only Buddhist kingdom. De facto constitu- 
tional monarchy with Druk Gyalpo (Dragon King) head of state 
and head of government. Royal family members serve as close ad- 
visers and heads of some ministries. Main executive organs Royal 
Advisory Council and Council of Ministers. Since August 1991 
eight ministries, with establishment of new Ministry of Planning. 
Unicameral National Assembly (Tshogdu); two-thirds of its 150 
members — representatives of general public — indirectly elected 
every three years; balance made up of monastic representatives 
appointed by Buddhist hierarchy and government officials appoint- 
ed by Druk Gyalpo. 

Politics: No legal political parties; political activities carried out 
by elite factions. Starting in late 1980s, unrest among Nepalese 
minority in south led to government's parallel efforts to accom- 
modate ethnic communities and restrict separatist activities amid 
increasing discontent and violence. 

Judiciary: Civil law system heavily influenced by Buddhist law 
based on seventeenth-century code. Druk Gyalpo final level of ap- 
peal. High Court and district courts; minor civil disputes adjudi- 
cated by village heads. 

Administrative Divisions: Four administrative zones (dzongdey) 
planned to provide central government services at local levels; in 
1991 eighteen districts (dzongkhag), ten of which were divided into 
subdistricts (dungkhag); and 191 village groups (gewog). Thimphu 
District not included in zonal administration. Municipal corpora- 
tions at Thimphu and Phuntsholing; 4,500 other villages and set- 
tlements. Nineteenth district — Gasa (part of Punakha District) — to 
be established under Seventh Development Plan (1992-97). 

Foreign Relations: Major aid recipient from India, international 
organizations, and developed countries. Traditionally relied first 
on Britain and then on India to direct foreign affairs; increasingly 



249 



asserted independence since joining United Nations in 1971. In 
1991 maintained diplomatic relations with only sixteen nations. 
Member of Asian Development Bank, Colombo Plan for Cooper- 
ative, Economic and Social Development in Asia and the Pacific, 
Coordination Bureau of Nonaligned Movement, International Civil 
Aviation Organization, International Development Association, 
International Monetary Fund, International Telecommunications 
Union, South Asian Association for Regional Cooperation, United 
Nations and its affiliated agencies, and Universal Postal Union. 

Media: Kuensel, government-owned weekly newspaper. Bhutan 
Broadcasting Service offers shortwave radio programming; daily 
FM broadcasts in Thimphu; no television reception. 

National Security 

Armed Forces: Royal Bhutan Army numbered about 6,000 in 
1990. 

Military Units and Equipment: Four operational wings head- 
quartered in Changju, Damthang, Goinchawa, and Yonphula; each 
organized into companies, platoons, and sections. Airport securi- 
ty unit at Paro. Royal Body Guards — elite VIP protection unit; 
some members with counterinsurgency training. Modern small 
arms; obsolescent Indian- supplied equipment. 

Military Budget: Unknown. 

Foreign Military Relations: India de facto protector, weapons 
supplier, and provider of advanced training. 

Paramilitary: Village security long-standing tradition. Modern 
militia controlled by central government. Universal militia train- 
ing by Royal Bhutan Army instituted 1989. Uniformed Forest 
Guards trained by Royal Bhutan Army to protect forests and sup- 
port border security. 

Police Forces: Royal Bhutan Police, subordinate to Royal Bhu- 
tan Army; headquarters in each district and subdistrict; provide 
border security. 



250 



Chapter 6. Bhutan 




Bhutan } s national symbol. The traditional sacred wheel of Buddhism is used 
to symbolize the king (center) surrounded by his ministers (the spokes). The 
two dragons surrounding the wheel stand for religious and secular adminis- 
tration. The jeweled umbrella, a Buddhist symbol of luck, suggests spiritual 
protection for the people of Bhutan; the lotus blossom at the bottom represents 
peace and gentleness. 



' ' IN THE THUNDER DRAGON KINGDOM, adorned with 
sandalwood, the protector who guards the teachings of the dual 
system; he, the precious and glorious ruler, causes dominion to 
spread while his unchanging person abides in constancy, as the 
doctrine of the Buddha flourishes, may the sun of peace and hap- 
piness shine on the people." These few words — the text of the na- 
tional anthem of Bhutan — sum up much about the spirit and culture 
of a society that sprang from an aboriginal people and was enriched 
by Tibetan, Mongol, and Indo-Burman migrants. Buddhism has 
been a pervasive influence in Bhutan throughout most of its histo- 
ry and has long been the state religion and source of civil law. Uni- 
fied Bhutan has had two forms of monarchy: from the sixteenth 
century to the early twentieth century, a dual system of shared civil 
and spiritual rule; and since 1907 the hereditary monarchy of the 
Wangchuck family. 

Once one of the many independent Himalayan kingdoms and 
principalities, Bhutan, like Nepal, is situated between two Asian 
powers, India and China, which, at best, have had an uneasy stand- 
off politically and militarily for nearly half a century (see fig. 2). 
Bhutan's independence has long been at issue in the geopolitical 
maneuverings between Tibet (and later China) and India. In the 
late twentieth century, Bhutan has fended off this external threat 
with conscientiously planned economic development. A serious in- 
ternal threat to Bhutan's traditional identity started peacefully in 
the 1950s and 1960s among the growing Nepalese minority, which 
represented 28 percent or more of the population in the early 1990s 
and emerged as a sometimes violent "prodemocracy" movement 
in the late 1980s. The 1990s promised to be a crucial period for 
the monarchy as it continued to foster economic and administra- 
tive reform amid efforts to retain traditional culture and to assuage 
minority unrest. 

Historical Setting 

Origins and Early Settlement, A.D. 600-1600 

Although knowledge of prehistoric Bhutan has yet to emerge 
through archaeological study, stone tools and weapons, remnants 
of large stone structures, and megaliths that may have been used 
for boundary markers or rituals provide evidence of civilization 



253 



Nepal and Bhutan: Country Studies 

as early as 2000 B.C. The absence of neolithic mythological legends 
argues against earlier inhabitation. With a little more certainty, 
historians theorize about the existence of the state of Lhomon (liter- 
ally, southern darkness) or Monyul (dark land, a reference to the 
Monpa aboriginal peoples of Bhutan), possibly a part of Tibet that 
was then beyond the pale of Buddhist teachings (see Religious Tra- 
dition, this ch.). Monyul is thought to have existed between 500 
B.C. and A.D. 600. The names Lhomon Tsendenjong (southern 
Mon sandalwood country) and Lhomon Khashi (southern Mon 
country of four approaches), found in ancient Bhutanese and Tibet- 
an chronicles, may also have credence and have been used by some 
Bhutanese scholars when referring to their homeland. Variations 
of the Sanskrit words Bhota-ant (end of Bhot, an Indian name for 
Tibet) or Bhu-uttan (meaning highlands) have been suggested by 
historians as origins of the name Bhutan, which came into common 
foreign use in the late nineteenth century and is used in Bhutan 
only in English-language official correspondence. The traditional 
name of the country since the seventeenth century has been 
Drukyul — country of the Drukpa, the Dragon People, or the Land 
of the Thunder Dragon — a reference to the country's dominant 
Buddhist sect. 

Some scholars believe that during the early historical period the 
inhabitants were fierce mountain aborigines, the Monpa, who were 
of neither the Tibetan or Mongol stock that later overran north- 
ern Bhutan. The people of Monyul practiced the shamanistic Bon 
religion, which emphasized worship of nature and the existence 
of good and evil spirits. During the latter part of this period, histor- 
ical legends relate that the mighty king of Monyul invaded a 
southern region known as the Duars, subduing the regions of 
modern Assam, West Bengal, and Bihar in India. 

Arrival of Buddhism 

The introduction of Buddhism occurred in the seventh century 
A.D., when Tibetan king Srongtsen Gampo (reigned A.D. 627-49), 
a convert to Buddhism, ordered the construction of two Buddhist 
temples, at Bumthang in central Bhutan and at Kyichu in the Paro 
Valley (see fig. 13). Buddhism replaced but did not eliminate the 
Bon religious practices that had also been prevalent in Tibet until 
the late sixth century. Instead, Buddhism absorbed Bon and its 
believers. As the country developed in its many fertile valleys, Bud- 
dhism matured and became a unifying element. It was Buddhist 
literature and chronicles that began the recorded history of Bhutan. 

In A.D. 747, a Buddhist saint, Padmasambhava (known in Bhu- 
tan as Guru Rimpoche and sometimes referred to as the Second 



254 



Bhutan 



Buddha), came to Bhutan from India at the invitation of one of 
the numerous local kings. After reportedly subduing eight classes 
of demons and converting the king, Guru Rimpoche moved on 
to Tibet. Upon his return from Tibet, he oversaw the construc- 
tion of new monasteries in the Paro Valley and set up his head- 
quarters in Bumthang. According to tradition, he founded the 
Nyingmapa sect — also known as the "old sect" or Red Hat sect — of 
Mahayana Buddhism, which became for a time the dominant 
religion of Bhutan. Guru Rimpoche plays a great historical and 
religious role as the national patron saint who revealed the 
tantras — manuals describing forms of devotion to natural energy — 
to Bhutan. Following the guru's sojourn, Indian influence played 
a temporary role until increasing Tibetan migrations brought new 
cultural and religious contributions. 

There was no central government during this period. Instead, 
small independent monarchies began to develop by the early ninth 
century. Each was ruled by a deb (king), some of whom claimed 
divine origins. The kingdom of Bumthang was the most promi- 
nent among these small entities. At the same time, Tibetan Bud- 
dhist monks {lam in Dzongkha, Bhutan's official national language) 
had firmly rooted their religion and culture in Bhutan, and mem- 
bers of joint Tibetan-Mongol military expeditions settled in fertile 
valleys. By the eleventh century, all of Bhutan was occupied by 
Tibetan- Mongol military forces. 

Rivalry among the Sects 

By the tenth century, Bhutan's political development was heav- 
ily influenced by its religious history. Following a period in which 
Buddhism was in decline in Tibet in the eleventh century, conten- 
tion among a number of subsects emerged. The Mongol overlords 
of Tibet and Bhutan patronized a sequence of subsects until their 
own political decline in the fourteenth century. By that time, the 
Gelugpa or Yellow Hat school had, after a period of anarchy in 
Tibet, become a powerful force resulting in the flight to Bhutan 
of numerous monks of various minor opposing sects. Among these 
monks was the founder of the Lhapa subsect of the Kargyupa school, 
to whom is attributed the introduction of strategically built dzong 
(fortified monasteries — see Glossary). Although the Lhapa subsect 
had been successfully challenged in the twelfth century by another 
Kargyupa subsect — the Drukpa — led by Tibetan monk Phajo Dru- 
gom Shigpo, it continued to proselytize until the seventeenth cen- 
tury. The Drukpa subsect, an unreformed Nyingmapa group in 
Tibet, spread throughout Bhutan and eventually became a 
dominant form of religious practice. Between the twelfth century 



255 



Nepal and Bhutan: Country Studies 

and the seventeenth century, the two Kargyupa subsects vied with 
one another from their respective dzong as the older form of Nying- 
mapa Buddhism was eclipsed. 

Theocratic Government, 1616-1907 

Consolidation and Defeat of Tibetan Invasions, 1616-51 

In the seventeenth century, a theocratic government indepen- 
dent of Tibetan political influence was established, and premodern 
Bhutan emerged. The theocratic government was founded by an 
expatriate Drukpa monk, Ngawang Namgyal, who arrived in Bhu- 
tan in 1616 seeking freedom from the domination of the Gelugpa 
subsect led by the Dalai Lama (Ocean Lama) in Lhasa. After a 
series of victories over rival subsect leaders and Tibetan invaders, 
Ngawang Namgyal took the title shabdrung (At Whose Feet One 
Submits, or, in many Western sources, dharma raja), becoming the 
temporal and spiritual leader of Bhutan. Considered the first great 
historical figure of Bhutan, he united the leaders of powerful 
Bhutanese families in a land called Drukyul. He promulgated a 
code of law and built a network of impregnable dzong, a system 
that helped bring local lords under centralized control and strength- 
ened the country against Tibetan invasions. Many dzong were ex- 
tant in the late twentieth century. 

Tibetan armies invaded Bhutan around 1629, in 1631, and again 
in 1639, hoping to throttle Ngawang Namgyal' s popularity before 
it spread too far. The invasions were thwarted, and the Drukpa 
subsect developed a strong presence in western and central Bhu- 
tan, leaving Ngawang Namgyal supreme. In recognition of the pow- 
er he accrued, goodwill missions were sent to Bhutan from Cooch 
Behar in the Duars (present-day northeastern West Bengal), Nepal 
to the west, and Ladakh in western Tibet, The ruler of Ladakh 
even gave a number of villages in his kingdom to Ngawang Nam- 
gyal. During the first war with Tibet, two Portuguese Jesuits — 
the first recorded Europeans to visit — passed through Bhutan on 
their way to Tibet. They met with Ngawang Namgyal, presented 
him with firearms, gunpowder, and a telescope, and offered him 
their services in the war against Tibet, but the shabdrung declined 
the offer. 

Bhutan's troubles were not over, however. In 1643 a joint 
Mongol-Tibetan force sought to destroy Nyingmapa refugees who 
had fled to Bhutan, Sikkim, and Nepal. The Mongols had seized 
control of religious and civil power in Tibet in the 1630s and es- 
tablished Gelugpa as the state religion. Bhutanese rivals of Ngawang 
Namgyal encouraged the Mongol intrusion, but the Mongol force 



256 



Bhutan 



was easily defeated in the humid lowlands of southern Bhutan. 
Another Tibetan invasion in 1647 also failed. 

During Ngawang Namgyal's rule, administration comprised a 
state monastic body with an elected head, the Je Khenpo (lord ab- 
bot), and a theocratic civil government headed by the druk desi (re- 
gent of Bhutan, also known as deb raja in Western sources). The 
druk desi was either a monk or a member of the laity — by the 
nineteenth century, usually the latter; he was elected for a three- 
year term, initially by a monastic council and later by the State 
Council (Lhengye Tshokdu). The State Council was a central ad- 
ministrative organ that included regional rulers, the shabdrung's 
chamberlains, and the druk desi. In time, the druk desi came under 
the political control of the State Council's most powerful faction 
of regional administrators. The shabdrung was the head of state and 
the ultimate authority in religious and civil matters. The seat of 
government was at Thimphu, the site of a thirteenth-century dzong, 
in the spring, summer, and fall. The winter capital was at Puna- 
kha, a dzong established northeast of Thimphu in 1527. The king- 
dom was divided into three regions (east, central, and west), each 
with an appointed ponlop, or governor, holding a seat in a major 
dzong. Districts were headed by dzongpon, or district officers, who 
had their headquarters in lesser dzong. The ponlop were combina- 
tion tax collectors, judges, military commanders, and procurement 
agents for the central government. Their major revenues came from 
the trade between Tibet and India and from land taxes. 

Ngawang Namgyal's regime was bound by a legal code called 
the Tsa Yig, which described the spiritual and civil regime and 
provided laws for government administration and for social and 
moral conduct. The duties and virtues inherent in the Buddhist 
dharma (religious law) played a large role in the new legal code, 
which remained in force until the 1960s. 

Administrative Integration and Conflict with Tibet, 1651-1728 

To keep Bhutan from disintegrating, Ngawang Namgyal's death 
in 1651 apparently was kept a carefully guarded secret for fifty- 
four years. Initially, Ngawang Namgyal was said to have entered 
into a religious retreat, a situation not unprecedented in Bhutan, 
Sikkim, or Tibet during that time. During the period of Ngawang 
Namgyal's supposed retreat, appointments of officials were issued 
in his name, and food was left in front of his locked door. 

Ngawang Namgyal's son and stepbrother, in 1651 and 1680, 
respectively, succeeded him. They started their reigns as minors 
under the control of religious and civil regents and rarely exercised 
authority in their own names. For further continuity, the concept 



257 



Nepal and Bhutan: Country Studies 

of multiple reincarnation of the first shabdrung — in the form of either 
his body, his speech, or his mind — was invoked by the Je Khenpo 
and the druk desi, both of whom wanted to retain the power they 
had accrued through the dual system of government. The last person 
recognized as the bodily reincarnation of Ngawang Namgyal died 
in the mid-eighteenth century, but speech and mind reincarnations, 
embodied by individuals who acceded to the position of shabdrung, 
were recognized into the early twentieth century. The power of 
the state religion also increased with a new monastic code that re- 
mained in effect in the early 1990s. The compulsory admission to 
monastic life of at least one son from any family having three or 
more sons was instituted in the late seventeenth century. In time, 
however, the State Council became increasingly secular as did the 
successive druk desi, ponlop, and dzongpon, and intense rivalries de- 
veloped among the ponlop of Tongsa and Paro and the dzongpon of 
Punakha, Thimphu, and Wangdiphodrang. 

During the first period of succession and further internal con- 
solidation under the druk desi government, there was conflict with 
Tibet and Sikkim. Internal opposition to the central government 
resulted in overtures by the opponents of the druk desi to Tibet and 
Sikkim. In the 1680s, Bhutan invaded Sikkim in pursuit of a re- 
bellious local lord. In 1700 Bhutan again invaded Sikkim, and in 
1714 Tibetan forces, aided by Mongolia, invaded Bhutan but were 
unable to gain control. 

Civil Conflict, 1728-72 

Civil war ensued when the "first reincarnation" of Ngawang 
Namgyal, Jigme Dakpa, was recognized as the shabdrung in 1728. 
A rival claimant, however, was promoted by opposition forces sup- 
ported by Tibet. The Tibetan-backed forces were defeated by Jigme 
Dakpa' s supporters, but the political system remained unstable. 
Regional rivalries contributed to the gradual disintegration of Bhu- 
tan at the time the first British agents arrived. 

In the early eighteenth century, Bhutan had successfully devel- 
oped control over the principality of Cooch Behar. The raja of 
Cooch Behar had sought assistance from Bhutan against the Indi- 
an Mughals in 1730, and Bhutanese political influence was not long 
in following. By the mid- 1760s, Thimphu considered Cooch Be- 
har its dependency, stationing a garrison force there and directing 
its civil administration. When the druk desi invaded Sikkim in 1770, 
Cooch Behari forces joined their Bhutanese counterparts in the 
offensive. In a succession dispute in Cooch Behar two years later, 
however, the druk desVs nominee for the throne was opposed by 



258 



Bhutan 



a rival who invited British troops, and, in effect, Cooch Behar be- 
came a dependency of the British East India Company. 

British Intrusion, 1772-1907 

Under the Cooch Behari agreement with the British, a British 
expeditionary force drove the Bhutanese garrison out of Cooch Be- 
har and invaded Bhutan in 1772-73. The druk desi petitioned Lha- 
sa for assistance from the Panchen Lama, who was serving as regent 
for the youthful Dalai Lama. In correspondence with the British 
governor general of India, however, the Panchen Lama instead 
castigated the druk desi and invoked Tibet's claim of suzerainty over 
Bhutan. 

Failing to receive help from Tibet, the druk desi signed a Treaty 
of Peace with the British East India Company on April 25, 1774. 
Bhutan agreed to return to its pre- 1730 boundaries, paid a sym- 
bolic tribute of five horses to Britain, and, among other conces- 
sions, allowed the British to harvest timber in Bhutan. Subsequent 
missions to Bhutan were made by the British in 1776, 1777, and 
1783, and commerce was opened between British India and Bhu- 
tan and, for a short time, Tibet. In 1784 the British turned over 
to Bhutanese control the Bengal Duars territory, where boundaries 
were poorly defined. As in its other foreign territories, Bhutan left 
administration of the Bengal Duars territory to local officials and 
collected its revenues. Although major trade and political relations 
failed to develop between Bhutan and Britain, the British had 
replaced the Tibetans as the major external threat. 

Boundary disputes plagued Bhutanese-British relations. To 
reconcile their differences, Bhutan sent an emissary to Calcutta 
in 1787, and the British sent missions to Thimphu in 1815 and 
1838. The 1815 mission was inconclusive. The 1838 mission offered 
a treaty providing for extradition of Bhutanese officials responsi- 
ble for incursions into Assam, free and unrestricted commerce be- 
tween India and Bhutan, and settlement of Bhutan's debt to the 
British. In an attempt to protect its independence, Bhutan reject- 
ed the British offer. Despite increasing internal disorder, Bhutan 
had maintained its control over a portion of the Assam Duars more 
or less since its reduction of Cooch Behar to a dependency in the 
1760s. After the British gained control of Lower Assam in 1826, 
tension between the countries began to rise as Britain exerted its 
strength. Bhutanese payments of annual tribute to the British for 
the Assam Duars gradually fell into arrears, however. The result- 
ing British demands for payment and military incursions into Bhu- 
tan in 1834 and 1835 brought about defeat for Bhutan's forces and 
a temporary loss of territory. 



259 



Nepal and Bhutan: Country Studies 

The British proceeded in 1841 to annex the formerly Bhutanese- 
controlled Assam Duars, paying a compensation of 10,000 rupees 
a year to Bhutan. In 1842 Bhutan gave up control to the British 
of some of the troublesome Bengal Duars territory it had ad- 
ministered since 1784. 

Charges and countercharges of border incursions and protec- 
tion of fugitives led to an unsuccessful Bhutanese mission to Cal- 
cutta in 1852. Among other demands, the mission sought increased 
compensation for its former Duars territories, but instead the British 
deducted nearly 3,000 rupees from the annual compensation and 
demanded an apology for alleged plundering of British-protected 
lands by members of the mission. Following more incidents and 
the prospect of an anti-Bhutan rebellion in the Bengal Duars, British 
troops deployed to the frontier in the mid- 1850s. The Sepoy Re- 
bellion in India in 1857-58 and the demise of the British East In- 
dia Company's rule prevented immediate British action. Bhutanese 
armed forces raided Sikkim and Cooch Behar in 1862, seizing peo- 
ple, property, and money. The British responded by withholding 
all compensation payments and demanding release of all captives 
and return of stolen property. Demands to the druk desi went un- 
heeded, as he was alleged to be unaware of his frontier officials' 
actions against Sikkim and Cooch Behar. 

Britain sent a peace mission to Bhutan in early 1864, in the wake 
of the recent conclusion of a civil war there. The dzongpon of 
Punakha — who had emerged victorious — had broken with the cen- 
tral government and set up a rival druk desi while the legitimate 
druk desi sought the protection of the ponlop of Paro and was later 
deposed. The British mission dealt alternately with the rival pon- 
lop of Paro and the ponlop of Tongsa (the latter acted on behalf of 
the druk desi), but Bhutan rejected the peace and friendship treaty 
it offered. Britain declared war in November 1864. Bhutan had 
no regular army, and what forces existed were composed of dzong 
guards armed with matchlocks, bows and arrows, swords, knives, 
and catapults. Some of these dzong guards, carrying shields and 
wearing chainmail armor, engaged the well-equipped British forces. 

The Duar War (1864-65) lasted only five months and, despite 
some battlefield victories by Bhutanese forces, resulted in Bhutan's 
defeat, loss of part of its sovereign territory, and forced cession of 
formerly occupied territories. Under the terms of the Treaty of Sin- 
chula, signed on November 11, 1865, Bhutan ceded territories in 
the Assam Duars and Bengal Duars, as well as the eighty-three- 
square-kilometer territory of Dewangiri in southeastern Bhutan, 
in return for an annual subsidy of 50,000 rupees. 



260 



Druk Gyalpo Jigme Singye 
Wangchuck, Bhutan's 
fourth hereditary monarch 
Courtesy Permanent Mission 
of the Kingdom of Bhutan, 
United Nations 



In the 1870s and 1880s, renewed competition among regional 
rivals — primarily the pro-British ponlop of Tongsa and the anti- 
British, pro-Tibetan ponlop of Paro — resulted in the ascendancy of 
Ugyen Wangchuck, the ponlop of Tongsa. From his power base in 
central Bhutan, Ugyen Wangchuck had defeated his political ene- 
mies and united the country following several civil wars and rebel- 
lions in 1882-85. His victory came at a time of crisis for the central 
government, however. British power was becoming more extensive 
to the south, and in the west Tibet had violated its border with Sik- 
kim, incurring British disfavor. After 1,000 years of close ties with 
Tibet, Bhutan faced the threat of British military power and was 
forced to make serious geopolitical decisions. The British, seeking 
to offset potential Russian advances in Lhasa, wanted to open trade 
relations with Tibet. Ugyen Wangchuck saw the opportunity to as- 
sist the British and in 1903-4 volunteered to accompany a British 
mission to Lhasa as a mediator. For his services in securing the 
Anglo-Tibetan Convention of 1904, Ugyen Wangchuck was knighted 
and thereafter continued to accrue greater power in Bhutan. 

Establishment of the Hereditary Monarchy, 1907 

Ugyen Wangchuck' s emergence as the national leader coincid- 
ed with the realization that the dual political system was obsolete 
and ineffective. He had removed his chief rival, the ponlop of Paro, 
and installed a supporter and relative, a member of the pro-British 



261 



Nepal and Bhutan: Country Studies 

Dorji family, in his place. When the last shabdrung died in 1903 
and a reincarnation had not appeared by 1906, civil administra- 
tion came under the control of Ugyen Wangchuck. Finally, in 1907, 
the fifty-fourth and last druk desi was forced to retire, and despite 
recognitions of subsequent reincarnations of Ngawang Namgyal, 
the shabdrung system came to an end. 

In November 1907, an assembly of leading Buddhist monks, 
government officials, and heads of important families was held to 
end the moribund 300-year-old dual system of government and 
to establish a new absolute monarchy. Ugyen Wangchuck was elect- 
ed its first hereditary Druk Gyalpo (Dragon King, reigned 1907-26; 
see The Monarchy, this ch.). The Dorji family became hereditary 
holders of the position of gongzim (chief chamberlain), the top 
government post. The British, wanting political stability on their 
northern frontier, approved of the entire development. 

Britain's earlier entreaties in Lhasa had unexpected repercus- 
sions at this time. China, concerned that Britain would seize Tibet, 
invaded Tibet in 1910 and asserted political authority. In the face 
of the Chinese military occupation, the Dalai Lama fled to India. 
China laid claim not only to Tibet but also to Bhutan, Nepal, and 
Sikkim. With these events, Bhutanese-British interests coalesced. 

A new Bhutanese-British agreement, the Treaty of Punakha, was 
signed on January 8, 1910. It amended two articles of the 1865 
treaty: the British agreed to double their annual stipend to 100,000 
rupees and "to exercise no interference in the internal adminis- 
tration of Bhutan." In turn, Bhutan agreed "to be guided by the 
advice of the British Government in regard to its external relations." 
The Treaty of Punakha guaranteed Bhutan's defense against China; 
China, in no position to contest British power, conceded the end 
of the millennium-long Tibetan-Chinese influence. 

Much of Bhutan's modern development has been attributed by 
Bhutanese historians to the first Druk Gyalpo. Internal reforms 
included introducing Western-style schools, improving internal 
communications, encouraging trade and commerce with India, and 
revitalizing the Buddhist monastic system. Toward the end of his 
life, Ugyen Wangchuck was concerned about the continuity of the 
family dynasty, and in 1924 he sought British assurance that the 
Wangchuck family would retain its preeminent position in Bhu- 
tan. His request led to an investigation of the legal status of Bhu- 
tan vis-a-vis the suzerainty held over Bhutan by Britain and the 
ambiguity of Bhutan's relationship to India. Both the suzerainty 
and the ambiguity were maintained. 



262 



Bhutan 



Development of Centralized Government, 1926-52 

Ugyen Wangchuck died in 1926 and was succeeded by his son, 
Jigme Wangchuck (reigned 1926-52). The second Druk Gyalpo 
continued his father's centralization and modernization efforts and 
built more schools, dispensaries, and roads. During Jigme Wang- 
chuck's reign, monasteries and district governments were increas- 
ingly brought under royal control. However, Bhutan generally 
remained isolated from international affairs. 

The issue of Bhutan's status vis-a-vis the government of India 
(was Bhutan a state of India or did it enjoy internal sovereignty?) 
was reexamined by London in 1932 as part of the issue of the sta- 
tus of India itself. It was decided to leave the decision to join an 
Indian federation up to Bhutan when the time came. When Brit- 
ish rule over India ended in 1947, so too did Britain's association 
with Bhutan. India succeeded Britain as the de facto protector of 
the Himalayan kingdom, and Bhutan retained control over its in- 
ternal government. It was two years, however, before a formal 
agreement recognized Bhutan's independence. 

Following the precedent set by the Treaty of Punakha, on Au- 
gust 8, 1949, Thimphu signed the Treaty of Friendship Between 
the Government of India and the Government of Bhutan, accord- 
ing to which external affairs, formerly guided by Britain, were to 
be guided by India (see Foreign Relations, this ch.). Like Britain, 
India agreed not to interfere in Bhutan's internal affairs. India also 
agreed to increase the annual subsidy to 500,000 rupees per year. 
Important to Bhutan's national pride was the return of Dewan- 
giri. Some historians believe that if India had been at odds with 
China at this time, as it was to be a decade later, it might not have 
acceded so easily to Bhutan's request for independent status. 

Modernization under Jigme Dorji, 1952-72 

The third Druk Gyalpo, Jigme Dorji Wangchuck, was enthroned 
in 1952. Earlier he had married the European-educated cousin of 
the chogyal (king) of Sikkim and with her support made continual 
efforts to modernize his nation throughout his twenty-year reign. 
Among his first reforms was the establishment of the National 
Assembly — the Tshogdu — in 1953. Although the Druk Gyalpo 
could issue royal decrees and exercise veto power over resolutions 
passed by the National Assembly, its establishment was a major 
move toward a constitutional monarchy (see Structure of the 
Government, this ch.). 

When the Chinese communists took over Tibet in 1951 , Bhutan 
closed its frontier with Tibet and sided with its powerful neighbor 



263 



Nepal and Bhutan: Country Studies 

to the south. To offset the chance of Chinese encroachment, Bhu- 
tan began a modernization program. Land reform was accompa- 
nied by the abolition of slavery and serfdom and the separation 
of the judiciary from the executive branch of government. Mostly 
funded by India after China's invasion of Tibet in 1959, the modern- 
ization program also included the construction of roads linking the 
Indian plains with central Bhutan. An all-weather road was com- 
pleted in 1962 between Thimphu and Phuntsholing, the overland 
gateway town on the southwest border with India. Dzongkha was 
made the national language during Jigme Dorji's reign (see Social 
System, this ch.). Additionally, development projects included es- 
tablishing such institutions as a national museum in Paro and a 
national library, national archives, and national stadium, as well 
as buildings to house the National Assembly, the High Court 
(Thrimkhang Gongma), and other government entities in Thim- 
phu. The position of gongzim, held since 1907 by the Dorji family, 
was upgraded in 1958 to lonchen (prime minister) and was still in 
the hands of the Dorji. Jigme Dorji Wangchuck's reforms, however, 
although lessening the authority of the absolute monarchy, also 
curbed the traditional decentralization of political authority among 
regional leaders and strengthened the role of the central govern- 
ment in economic and social programs. 

Modernization efforts moved forward in the 1960s under the 
direction of the lonchen, Jigme Palden Dorji, the Druk Gyalpo's 
brother-in-law. In 1962, however, Dorji incurred disfavor with the 
Royal Bhutan Army over the use of military vehicles and the forced 
retirement of some fifty officers. Religious elements also were 
antagonized by Dorji's efforts to reduce the power of the state- 
supported religious institutions. In April 1964, while the Druk Gyal- 
po was in Switzerland for medical care, Dorji was assassinated in 
Phuntsholing by an army corporal. The majority of those arrested 
and accused of the crime were military personnel and included the 
army chief of operations, Namgyal Bahadur, the Druk Gyalpo's 
uncle, who was executed for his part in the plot. 

The unstable situation continued under Dorji's successor as acting 
lonchen, his brother Lhendup Dorji, and for a time under the Druk 
Gyalpo's brother, Namgyal Wangchuck, as head of the army. Accord- 
ing to some sources, a power struggle ensued between pro-Wang- 
chuck loyalists and "modernist" Dorji supporters. The main issue 
was not an end to or lessening of the power of the monarchy but 
"full freedom from Indian interference." Other observers believe 
the 1964 crisis was not so much a policy struggle as competition 
for influence on the palace between the Dorji family and the Druk 
Gyalpo's Tibetan mistress, Yangki, and her father. Nevertheless, 



264 



Bhutan 



with the concurrence of the National Assembly, Lhendup Dorji 
and other family members were exiled in 1965. The tense political 
situation continued, however, with an assassination attempt on the 
Druk Gyalpo himself in July 1965. The Dorjis were not implicat- 
ed in the attempt, and the would-be assassins were pardoned by 
the Druk Gyalpo. 

In 1966, to increase the efficiency of government administra- 
tion, Jigme Dorji Wangchuck made Thimphu the year-round cap- 
ital. In May 1968, the comprehensive Rules and Regulations of 
the National Assembly revised the legal basis of the power granted 
to the National Assembly. The Druk Gyalpo decreed that henceforth 
sovereign power, including the power to remove government 
ministers and the Druk Gyalpo himself, would reside with the Na- 
tional Assembly. The following November, the Druk Gyalpo 
renounced his veto power over National Assembly bills and said 
he would step down if two-thirds of the legislature passed a no- 
confidence vote. Although he did nothing to undermine the reten- 
tion of the Wangchuck dynasty, the Druk Gyalpo in 1969 called 
for a triennial vote of confidence by the National Assembly (later 
abolished by his successor) to renew the Druk Gyalpo 's mandate 
to rule. 

Diplomatic overtures also were made during Jigme Dorji Wang- 
chuck's reign. Although always seeking to be formally neutral and 
nonaligned in relations with China and India, Bhutan also sought 
more direct links internationally than had occurred previously under 
the foreign-policy guidance of India. Consequently, in 1962 Bhu- 
tan joined the Colombo Plan for Cooperative, Economic, and 
Social Development in Asia and the Pacific (Colombo Plan; see 
Glossary) and in 1 966 notified India of its desire to become a mem- 
ber of the United Nations (UN). In 1971 after holding observer 
status for three years, Bhutan was admitted to the UN. In an ef- 
fort to maintain Bhutan as a stable buffer state, India continued 
to provide substantial amounts of development aid. 

Jigme Dorji Wangchuck ruled until his death in July 1972 and 
was succeeded by his seventeen-year-old son, Jigme Singye Wang- 
chuck. The close ties of the Wangchuck and Dorji families were 
reemphasized in the person of the new king, whose mother, Ashi 
Kesang Dorji {ashi means princess), was the sister of the lonchen, 
Jigme Palden Dorji. Jigme Singye Wangchuck, who had been edu- 
cated in India and Britain, had been appointed ponlop of Tongsa 
in May 1972 and by July that year had become the Druk Gyalpo. 
With his mother and two elder sisters as advisers, the new Druk 
Gyalpo was thrust into the affairs of state. He was often seen 
among the people, in the countryside, at festivals, and, as his reign 



265 



Nepal and Bhutan: Country Studies 

progressed, meeting with foreign dignitaries in Bhutan and abroad. 
His formal coronation took place in June 1974, and soon there- 
after the strains between the Wangchucks and Dorjis were relieved 
with the return that year of the exiled members of the latter family. 
The reconciliation, however, was preceded by reports of a plot to 
assassinate the new Druk Gyalpo before his coronation could take 
place and to set fire to the Tashichhodzong (Fortress of the Glori- 
ous Religion, the seat of government in Thimphu). Yangki was 
the alleged force behind the plot, which was uncovered three months 
before the coronation; thirty persons were arrested, including high 
government and police officials. 

Entering the Outside World, 1972-86 

When civil war broke out in Pakistan in 1971 , Bhutan was among 
the first nations to recognize the new government of Bangladesh, 
and formal diplomatic relations were established in 1973. An event 
in 1975 may have served as a major impetus to Bhutan to speed 
up reform and modernization. In that year, neighboring Sikkim's 
monarchy, which had endured for more than 300 years, was oust- 
ed following a plebiscite in which the Nepalese majority outvoted 
the Sikkimese minority. Sikkim, long a protectorate of India, be- 
came India's twenty-second state. 

To further ensure its independence and international position, 
Bhutan gradually established diplomatic relations with other na- 
tions and joined greater numbers of regional and international or- 
ganizations. Many of the countries with which Bhutan established 
relations provided development aid (see Foreign Economic Rela- 
tions, this ch.). Moderization brought new problems to Bhutan in 
the late 1980s (see Political Developments, this ch.). 

The Society and Its Environment 

Geography 

The Land 

Landlocked Bhutan is situated in the eastern Himalayas and is 
mostly mountainous and heavily forested. It is bordered for 470 
kilometers by Tibet (China's Xizang Autonomous Region) to the 
north and northwest and for 605 kilometers by India's states of 
Sikkim to the west, West Bengal to the southwest, Assam to the 
south and southeast, and Arunachal Pradesh (formerly the North- 
East Frontier Agency) to the east. Sikkim, an eighty-eight-kilometer- 
wide territory, divides Bhutan from Nepal, while West Bengal 
separates Bhutan from Bangladesh by only sixty kilometers. At its 
longest east- west dimension, Bhutan stretches around 300 kilometers; 



266 




Figure 14. Bhutan: Topography and Drainage 
268 



Bhutan 



it measures 170 kilometers at its maximum north-south dimension, 
forming a total of 46,500 square kilometers, an area one-third the 
size of Nepal. In the mid-1980s, about 70 percent of Bhutan was 
covered with forests; 10 percent was covered with year-round snow 
and glaciers; nearly 6 percent was permanently cultivated or used 
for human habitation; another 3 percent was used for shifting cul- 
tivation (tsheri), a practice banned by the government; and 5 per- 
cent was used as meadows and pastures. The rest of the land was 
either barren rocky areas or scrubland. 

Early British visitors to Bhutan reported "dark and steep glens, 
and the high tops of mountains lost in the clouds, constituting] 
altogether a scene of extraordinary magnificence and sublimity." 
One of the most rugged mountain terrains in the world, it has ele- 
vations ranging from 160 meters to more than 7,000 meters above 
sea level, in some cases within distances of less than 100 kilome- 
ters of each other. Bhutan's highest peak, at 7,554 meters above 
sea level, is north-central Kulha Gangri, close to the border with 
China; the second highest peak, Chomo Lhari, overlooking the 
Chumbi Valley in the west, is 7,314 meters above sea level; nineteen 
other peaks exceed 7,000 meters (see fig. 14). 

In the north, the snowcapped Great Himalayan Range reaches 
heights of over 7,500 meters above sea level and extends along the 
Bhutan-China border. The northern region consists of an arc of 
glaciated mountain peaks with an arctic climate at the highest ele- 
vations. Watered by snow-fed rivers, alpine valleys in this region 
provide pasturage for livestock tended by a sparse population of 
migratory shepherds. 

The Inner Himalayas are southward spurs of the Great Hima- 
layan Range. The Black Mountains, in central Bhutan, form a 
watershed between two major river systems, the Mo Chhu and the 
Drangme Chhu {chhu means river). Peaks in the Black Mountains 
range between 1 ,500 meters and 2,700 meters above sea level, and 
the fast-flowing rivers have carved out spectacular gorges in the 
lower mountain areas. The woodlands of the central region pro- 
vide most of Bhutan's valuable forest production. Eastern Bhutan 
is divided by another southward spur, the Donga Range. Western 
Bhutan has fertile, cultivated valleys and terraced river basins. 

In the south, the Southern Hills, or Siwalik Hills, the foothills 
of the Himalayas, are covered with dense deciduous forest, alluvi- 
al lowland river valleys, and mountains that reach to around 1 ,500 
meters above sea level. The foothills descend into the subtropical 
Duars Plain. Most of the Duars Plain proper is located in India, 
and ten to fifteen kilometers penetrate inside Bhutan. The Bhutan 
Duars has two parts. The northern Duars, which abuts the 



269 



Nepal and Bhutan: Country Studies 

Himalayan foothills, has rugged, slopping terrain and dry porous 
soil with dense vegetation and abundant wildlife. The southern 
Duars has moderately fertile soil, heavy savanna grass, dense mixed 
jungle, and freshwater springs. Taken as a whole, the Duars 
provides the greatest amount of fertile fladands in Bhutan. Rice 
and other crops are grown on the plains and mountainsides up to 
1,200 meters. Bhutan's most important commercial centers — 
Phuntsholing, Geylegphug, and Samdrup Jongkhar — are located 
in the Duars, reflecting the meaning of the name, which is derived 
from the Hindi dwar and means gateway. Rhinoceros, tigers, 
leopards, elephants, and other wildlife inhabit the region. 

Climate 

Bhutan's climate is as varied as its altitudes and, like most of 
Asia, is affected by monsoons. Western Bhutan is particularly af- 
fected by monsoons that bring between 60 and 90 percent of the 
region's rainfall. The climate is humid and subtropical in the 
southern plains and foothills, temperate in the inner Himalayan 
valleys of the southern and central regions, and cold in the north, 
with year-round snow on the main Himalayan summits. 

Temperatures vary according to elevation. Temperatures in 
Thimphu, located at 2,200 meters above sea level in west-central 
Bhutan, range from approximately 15°C to 26°C during the mon- 
soon season of June through September but drop to between about 
- 4°C and 16°C in January (see table 22, Appendix). Most of the 
central portion of the country experiences a cool, temperate cli- 
mate year-round. In the south, a hot, humid climate helps main- 
tain a fairly even temperature range of between 15°C and 30°C 
year-round, although temperatures sometimes reach 40 °C in the 
valleys during the summer. 

Annual precipitation ranges widely in various parts of the coun- 
try. In the severe climate of the north, there is only about forty 
millimeters of annual precipitation — primarily snow. In the tem- 
perate central regions, a yearly average of around 1 ,000 millimeters 
is more common, and 7,800 millimeters per year has been registered 
at some locations in the humid, subtropical south, ensuring the 
thick tropical forest, or savanna. Thimphu experiences dry winter 
months (December through February) and almost no precipitation 
until March, when rainfall averages 20 millimeters a month and 
increases steadily thereafter to a high of 220 millimeters in August 
for a total annual rainfall of nearly 650 millimeters. 

Bhutan's generally dry spring starts in early March and lasts 
until mid- April. Summer weather commences in mid- April with 
occasional showers and continues through the premonsoon rains 



270 



Bhutan 



of late June. The summer monsoon lasts from late June through 
late September with heavy rains from the southwest. The monsoon 
weather, blocked from its northward progress by the Himalayas, 
brings heavy rains, high humidity, flash floods and landslides, and 
numerous misty, overcast days. Autumn, from late September or 
early October to late November, follows the rainy season. It is 
characterized by bright, sunny days and some early snowfalls at 
higher elevations. From late November until March, winter sets 
in, with frost throughout much of the country and snowfall com- 
mon above elevations of 3,000 meters. The winter northeast mon- 
soon brings gale-force winds down through high mountain passes, 
giving Bhutan its name — Drukyul, which in the Dzongkha lan- 
guage means Land of the Thunder Dragon. 

River Systems 

Bhutan has four major river systems: the Drangme Chhu; the 
Puna Tsang Chhu, also called the Sankosh; the Wang Chhu; and 
the Torsa Chhu. Each flows swiftly out of the Himalayas, southerly 
through the Duars to join the Brahmaputra River in India, and 
thence through Bangladesh where the Brahmaputra (or Jamuna 
in Bangladesh) joins the mighty Ganges (or Padma in Bangladesh) 
to flow into the Bay of Bengal. The largest river system, the 
Drangme Chhu, flows southwesterly from India's state of Arunachal 
Pradesh and has three major branches: the Drangme Chhu, 
Mangde Chhu, and Bumthang Chhu. These branches form the 
Drangme Chhu basin, which spreads over most of eastern Bhutan 
and drains the Tongsa and Bumthang valleys. In the Duars, where 
eight tributaries join it, the Drangme Chhu is called the Manas 
Chhu. The 320-kilometer-long Puna Tsang Chhu rises in north- 
western Bhutan as the Mo Chhu and Pho Chhu, which are fed 
by the snows from the Great Himalayan Range. They flow souther- 
ly to Punakha, where they join to form the Puna Tsang Chhu, which 
flows southerly into India's state of West Bengal. The tributaries 
of the 370-kilometer-long Wang Chhu rise in Tibet. The Wang 
Chhu itself flows southeasterly through west-central Bhutan, drains 
the Ha, Paro, and Thimphu valleys, and continues into the Du- 
ars, where it enters West Bengal as the Raigye Chhu. The smallest 
river system, the Torsa Chhu, known as the Amo Chhu in its north- 
ern reaches, also flows out of Tibet into the Chumbi Valley and 
swiftly through western Bhutan before broadening near Phuntsho- 
ling and then flowing into India. 

Glaciers 

Glaciers in northern Bhutan, which cover about 10 percent of 



271 



Nepal and Bhutan: Country Studies 

the total surface area, are an important renewable source of water 
for Bhutan's rivers. Fed by fresh snow each winter and slow melt- 
ing in the summer, the glaciers bring millions of liters of fresh water 
to Bhutan and downriver areas each year. Glacial melt added to 
monsoon-swollen rivers, however, also contributes to flooding and 
potential disaster. 

Population 

Size, Structure, and Settlement Patterns 

When Bhutan's first national census was conducted in 1969, the 
population officially stood at 930,614 persons. Before 1969 popu- 
lation estimates had ranged between 300,000 and 800,000 people. 
The 1969 census has been criticized as inaccurate. By the time the 
1980 census was held, the population reportedly had increased to 
approximately 1,165,000 persons (see table 23, Appendix). The 
results of the 1988 census had not been released as of 1991, but 
preliminary government projections in 1988 set the total popula- 
tion at 1 ,375,400 persons, whereas UN estimates stood at 1 ,451 ,000 
people in 1988. Other foreign projections put the population at 
1,598,216 persons in July 1991. It is likely, however, that Bhu- 
tan's real population was less than 1 million and probably as little 
as 600,000 in 1990. Moreover, the government itself began to use 
the figure of "about 600,000 citizens" in late 1990. 

The annual growth rate in 1990 was 2 percent. Although the 
wide variation in population size makes all projections flawed, ex- 
perts believe that the population growth rate is valid. The birth 
rate was 37 per 1,000, and the death rate was 17 per 1,000. In 
1988 UN experts had estimated Bhutan would have a population 
of 1.9 million by 2000 and 3 million by 2025. The average annual 
population growth rate was estimated at 1.9 percent during the 
period from 1965 to 1970 and 1.8 percent during the period 1980 
to 1985. Rates of change were projected to increase to 2.1 percent 
by 1990 and 2.3 percent by 2000 and to decrease to 1.41 percent 
by 2025. Total fertility rates (the average number of children born 
during a woman's reproductive years) have declined since the 1950s, 
however. The rate stood at 6.0 in 1955 and 5.5 in 1985 and was 
expected to decline to 3.7 by 2005 and 2.5 by 2025. The infant 
mortality rate was the highest in South Asia in 1990: 137 deaths 
per 1 ,000 live births. Despite the declining population growth most 
of Bhutan's people were young. By the late 1980s, 45 percent of 
the population was under fifteen years of age. However, the greater 
number of female infant deaths resulted in one of the world's lowest 
male-female ratios (97.2 females to 100 males; see fig. 15). 



272 



Bhutan 



Life expectancy at birth had increased significantly since the 
1950s, when it stood at only 36.3 years. By the early 1980s, life 
expectancy had reached 45.9 years. In 1989 the UN projected that 
life expectancy at birth in Bhutan would reach 55.5 years by 2005 
and 61.8 years by 2025, still low compared with other South Asian 
countries and with the other least developed nations of the world. 

Overall population density was thirty-one persons per square 
kilometer in the late 1980s, but because of the rugged terrain dis- 
tribution was more dense in settled areas. The regions in the 
southern Duars valleys and eastern Bhutan around the fertile 
Tashigang Valley were the most populous areas. As was common 
among the least developed nations, there was a trend, albeit small, 
toward urbanization. Whereas in 1970 only 3 percent of the popu- 
lation lived in urban settings, the percentage had increased to 5 
percent in 1985. UN specialists projected the urban population 
would reach 8 percent by 2000. With the exception of Tuvalu, Bhu- 
tan had the lowest urban population of any country among the forty- 
one least developed nations of the world. 

Thimphu, the capital, the largest urban area, had a population 
of 27,000 persons in 1990. Most employed residents of Thimphu, 
some 2,860 in 1990, were government employees. Another 2,200 
persons worked in private businesses and cottage industries. The 
city advanced toward modernization in 1987 with the installation 
of meters to regulate water consumption, the naming of its streets, 
and the erection of street signs. The only other urban area with 
a population of more than 10,000 residents was Phuntsholing in 
Chhukha District. 

Ethnic Groups 

Bhutan's society is made up of four broad but not necessarily 
exclusive groups: the Ngalop, the Sharchop, several aboriginal peo- 
ples, and Nepalese. The Ngalop (a term thought to mean the earliest 
risen or first converted) are people of Tibetan origin who migrat- 
ed to Bhutan as early as the ninth century. For this reason, they 
are often referred to in foreign literature as Bhote (people of Bho- 
tia or Tibet). The Ngalop are concentrated in western and north- 
ern districts. They introduced Tibetan culture and Buddhism to 
Bhutan and comprised the dominant political and cultural element 
in modern Bhutan. 

The Sharchop (the word means easterner), an Indo-Mongoloid 
people who are thought to have migrated from Assam or possibly 
Burma during the past millennium, comprise most of the popula- 
tion of eastern Bhutan. Although long the biggest ethnic group in 
Bhutan, the Sharchop have been largely assimilated into the 
Tibetan-Ngalop culture. Because of their proximity to India, some 



273 



Nepal and Bhutan: Country Studies 



AGE-GROUP 

80 and over 
75-79 
70-74 
65-69 
60-64 
55-59 
50-54 
45-49 
40-44 
35-39 
30-34 
25-29 
20-24 
15-19 
10-14 
5-9 
0-4 





































- 


a 






















E 


a 














MALES 


■Z 


a 


FEMALES 














1 


X3 






















1 


XX 
























XX) 




















i 


xx> 


1 


















■ 




xx> 




















■ 




xx> 
























xx> 


OQ 




















xx> 






















XK> 


<xx 


>4 


















x>^ 




KX 


















xx> 




KX3 
















xx> 




KX> 


si 










XX> 




xx> 


XX 


XJ 





125 100 75 50 25 25 50 75 100 125 
POPULATION IN THOUSANDS 



Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 2. 



Figure 15. Bhutan: Population Distribution by Age and Sex, 1988 

speak Assamese or Hindi. They practice slash-and-burn and tsheri 
agriculture, planting dry-rice crops for three or four years until 
the soil is exhausted and then moving on. 

The third group consists of small aboriginal or indigenous tribal 
peoples living in scattered villages throughout Bhutan. Culturally 
and linguistically part of the populations of West Bengal or As- 
sam, they embrace the Hindu system of endogamous groups ranked 
by hierarchy and practice wet-rice and dry-rice agriculture. They 
include the Drokpa, Lepcha, and Doya tribes as well as the descen- 
dants of slaves who were brought to Bhutan from similar tribal areas 
in India. The ex-slave communities tended to be near traditional 
population centers because it was there that they had been pressed 
into service to the state. Together, the Ngalop, Sharchop, and tribal 
groups were thought to constitute up to 72 percent of the popula- 
tion in the late 1980s. 



274 



Bhutan 



The remaining 28 percent of the population were of Nepalese 
origin. Officially, the government stated that 28 percent of the na- 
tional population was Nepalese in the late 1980s, but unofficial es- 
timates ran as high as 30 to 40 percent, and Nepalese were estimated 
to constitute a majority in southern Bhutan. The number of legal 
permanent Nepalese residents in the late 1980s may have been as 
few as 15 percent of the total population, however. The first small 
groups of Nepalese, the most recent of the major groups to arrive 
in Bhutan, emigrated primarily from eastern Nepal under Indian 
auspices in the late nineteenth and early twentieth centuries. Mosdy 
Hindus, the Nepalese settled in the southern foothills and are some- 
times referred to as southern Bhutanese. Traditionally, they have 
been involved mosdy in sedentary agriculture, although some have 
cleared forest cover and conducted tsheri agriculture. The most divi- 
sive issue in Bhutan in the 1980s and early 1990s was the accom- 
modation of the Nepalese Hindu minority. The government 
traditionally attempted to limit immigration and restrict residence 
and employment of Nepalese to the southern region. Liberaliza- 
tion measures in the 1970s and 1980s encouraged intermarriage 
and provided increasing opportunities for public service. More in- 
country migration by Nepalese seeking better education and busi- 
ness opportunities was allowed. 

Bhutan also had a sizable modern Tibetan refugee population, 
which stood at 10,000 persons in 1987. The major influx of 6,000 
persons came in 1959 in the wake of the Chinese army's invasion 
and occupation of Tibet. The Tibetan expatriates became only par- 
tially integrated into Bhutanese society, however, and many were 
unwilling to accept citizenship. Perceiving a lack of allegiance to 
the state on the part of Tibetans, the government decided in 1979 
to expel to India those who refused citizenship. India, after some 
reluctance, acceded to the move and accepted more than 3,100 Tibet- 
ans between 1980 and 1985. Another 4,200 Tibetans requested and 
received Bhutanese citizenship. Although Bhutan traditionally wel- 
comed refugees — and still accepted a few new ones fleeing the 1989 
imposition of martial law in Tibet — government policy in the late 
1980s was to refuse more Tibetan refugees. 

Languages 

Bhutanese speak one or more of four major, mutually unintel- 
ligible languages. Traditionally, public and private communica- 
tions, religious materials, and official documents were written in 
chhokey, the classical Tibetan script, and a Bhutanese adaptive cur- 
sive script was developed for correspondence. In modern times, 
as in the past, chhokey, which exists only in written form, was 



275 



Nepal and Bhutan: Country Studies 

understood only by the well educated. The official national lan- 
guage, Dzongkha (language of the dzong), has developed since the 
seventeenth century. A sophisticated form of the Tibetan dialect 
spoken by Ngalop villagers in western Bhutan, it is based primar- 
ily on the vernacular speech of the Punakha Valley. In its written 
form, Dzongkha uses an adaptive cursive script based on chhokey 
to express the Ngalop spoken language. Ngalopkha is spoken in 
six regional dialects with variations from valley to valley and vil- 
lage to village; Dzongkha, however, through vigorous government 
education programs had become widely understood throughout 
Bhutan by the 1970s. 

The other languages include Sharchopkha, or Tsangla, a Mon 
language spoken in eastern districts; Bumthangkha, an aboriginal 
Khen language spoken in central Bhutan; and Nepali, or Lhot- 
sam, predominantly spoken in the south. Seven other Khen and 
Mon languages also are spoken in Bhutan. Hindi is understood 
among Bhutanese educated in India and was the language of in- 
struction in the schools at Ha and Bumthang in the early 1930s 
as well as in the first schools in the "formal" education system 
from the beginning of the 1960s. 

Along with Dzongkha and English, Nepali was once one of the 
three official languages used in Bhutan. Dzongkha was taught in 
grades one through twelve in the 1980s. English was widely un- 
derstood and was the medium of instruction in secondary and 
higher-level schools. Starting in the 1980s, college-level textbooks 
in Dzongkha were published, and in 1988 a proposal was made 
to standardize Dzongkha script. Sharchopkha, Bumthangkha, and 
Nepali also were used in primary schools in areas where speakers 
of those languages predominated. In 1989, however, Nepali was 
dropped from school curricula. 

Part of the government's effort to preserve traditional culture 
and to strengthen the contemporary sense of national identity 
(driglam namzha — national customs and etiquette) has been its em- 
phasis on Dzongkha-language study. The Department of Educa- 
tion declared in 1979 that because Dzongkha was the national 
language, it was "the responsibility of each and every Bhutanese 
to learn Dzongkha." To aid in language study, the department 
also published a Dzongkha dictionary in 1986. 

Social System 

Society 

Bhutan's traditional society has been defined as both patriarchal 
and matriarchal, and the member held in highest esteem served as 



276 



Bhutan 



the family's head. Bhutan also has been described as feudalistic 
and characterized by the absence of strong social stratification. In 
premodern times, there were three broad classes: the monastic com- 
munity, the leadership of which was the nobility; lay civil servants 
who ran the government apparatus; and farmers, the largest class, 
living in self-sufficient villages. In the more militaristic premodern 
era, Bhutan also had an underclass of prisoners of war and their 
descendants, who were generally treated as serfs or even as slaves. 
In modern times, society was organized around joint family units, 
and a class division existed based on occupation and, in time, so- 
cial status. With the introduction of foreign practices in recent cen- 
turies and increasing job mobility outside the village, however, 
emphasis has been placed on nuclear family units. 

Social status is based on a family's economic station. Except 
among the Hindu Nepalese in southern Bhutan, there was no caste 
system. Although Bhutanese were endogamous by tradition, 
modern practices and even royal decrees encouraged ethnic integra- 
tion in the late twentieth century. Primogeniture dictated the right 
of inheritance traditionally, although in some central areas the eld- 
est daughter was the lawful successor. In contemporary Bhutan, 
however, inheritance came to be more equally distributed among 
all children of a family. 

Except for the royal family and a few other noble families, 
Bhutanese do not have surnames. Individuals normally have two 
names, but neither is considered a family name or a surname. Some 
people adopt their village name, occasionally in abbreviated form, 
as part of their name, using it before their given name. Wives keep 
their own names, and children frequently have names unconnect- 
ed to either parent. Some individuals educated abroad have taken 
their last name as a surname, however. A system of tides, depending 
on age, degree of familiarity, and social or official status, denotes 
ranks and relationships among members of society. The title dasho, 
for example, is an honorific used by a prince of the royal house, 
a commoner who marries a princess, a nephew of the Druk Gyal- 
po, a deputy minister, other senior government officials, and others 
in positions of authority. 

Although adherents of Buddhism, Bhutanese are not vegetari- 
ans and occasionally eat beef, especially in western Bhutan. Pork, 
poultry, goat and yak meat, and fish are consumed on a limited 
scale. Rice and increasingly corn are staples. Despite a scarcity of 
milk, dairy products, such as yak cheese and yak cheese byproducts, 
are part of the diet of upland people. Meat soups, rice or corn, 
and curries spiced with chilies comprise daily menus; beverages 



277 



Nepal and Bhutan: Country Studies 

include buttered tea and beer distilled from cereals. Wild vegeta- 
tion, such as young ferns, also is harvested for table food. 

Traditional clothing still was commonly worn in the early 1990s, 
and, indeed, its use was fostered by government decree. Women 
wore the kira, an ankle-length dress made of a rectangular piece 
of cloth held at the shoulders with a clip and closed with a woven 
belt at the waist, over a long-sleeved blouse. Social status was in- 
dicated by the amount of decorative details and colors of the kira 
and the quality of the cloth used. Men wore the gho, a wraparound, 
coatlike, knee-length garment, with a narrow belt. Both men and 
women sometimes wore elaborate earrings, and both sexes also wore 
scarves or shawls, white for commoners and carefully specified 
colors, designs, and manners of folding for higher ranking individu- 
als. Only the Druk Gyalpo and the Je Khenpo were allowed to 
wear the honorific saffron scarf. Other officials were distinguished 
by the color of the scarves they wore: orange for ministers and 
deputy ministers, blue for National Assembly and Royal Adviso- 
ry Council members, and red or maroon for high religious and 
civil officials, district officers, and judges (anyone holding the title 
of dasho). Stripes on scarves of the same base color denoted greater 
or lesser ranks. 

Marriage and Family Life 

The traditional practice, arranged marriages based on family 
and ethnic ties, has been replaced in the late twentieth century with 
marriages based on mutual affection. Marriages were usually ar- 
ranged by the partners in contemporary Bhutan, and the mini- 
mum age was sixteen for women and twenty-one for men. The 
institution of child marriage, once relatively widespread, had largely 
declined as Bhutan modernized, and there were only remnants of 
the practice in the late twentieth century. Interethnic marriages, 
once forbidden, were encouraged in the late 1980s by an incentive 
of a Nu 10,000 (for value of the ngultrum — see Glossary) govern- 
ment stipend to willing couples. The stipend was discontinued in 
1991, however. Marriages of Bhutanese citizens to foreigners, 
however, have been discouraged. Bhutanese with foreign spouses 
were not allowed to obtain civil service positions and could have 
their government scholarships cancelled and be required to repay 
portions already received. Foreign spouses were not entitled to 
citizenship by right but had to apply for naturalization. 

Polyandry was abolished and polygamy was restricted in the mid- 
twentieth century, but the law in the 1990s still allowed a man as 
many as three wives, providing he had the first wife's permission. 
The first wife also had the power to sue for divorce and alimony 



278 




Bhutanese girl, wearing traditional kira and jewelry 
Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

if she did not agree. In the 1980s, divorce was common, and new 
laws provided better benefits to women seeking alimony. 

Family life, both traditionally and in the contemporary period, 
was likely to provide for a fair amount of self-sufficiency. Fami- 
lies, for example, often made their own clothing, bedding, floor 
and seat covers, tablecloths, and decorative items for daily and re- 
ligious use. Wool was the primary material, but domestic silk and 
imported cotton were also used in weaving colorful cloth, often 
featuring elaborate geometric, floral, and animal designs. Although 
weaving was normally done by women of all ages using family- 
owned looms, monks sometimes did embroidery and applique work. 
In the twentieth century, weaving was possibly as predominant a 
feature of daily life as it was at the time of Bhutan's unification 
in the seventeenth century. 

Landholdings varied depending on the wealth and size of in- 
dividual families, but most families had as much land as they could 
farm using traditional techniques. A key element of family life was 
the availability of labor. Thus, the choice of the home of newlyweds 
was determined by which parental unit had the greatest need of 
supplemental labor. If both families had a sufficient supply of labor, 
then a bride and groom might elect to set up their own home. 



279 



Nepal and Bhutan: Country Studies 
Role of Women 

Although officially the government has encouraged greater par- 
ticipation of women in political and administrative life, male mem- 
bers of the traditional aristocracy dominate the social system. 
Economic development has increased opportunities for women to 
participate in fields such as medicine, both as physicians and nurses; 
teaching; and administration. By 1989 nearly 10 percent of govern- 
ment employees were women, and the top civil service examina- 
tion graduate in 1989 was a woman. During their government 
careers, women civil servants were allowed three months materni- 
ty leave with full pay for three deliveries and leave without pay 
for any additional deliveries. Reflecting the dominance of males 
in society, girls were outnumbered three to two in primary and 
secondary -level schools. 

Women in the 1980s played a significant role in the agricultural 
work force, where they outnumbered men, who were leaving for 
the service sector and other urban industrial and commercial ac- 
tivities. In the mid-1980s, 95 percent of all Bhutanese women from 
the ages of fifteen to sixty-four years were involved in agricultural 
work, compared with only 78 percent of men in the same age range. 
Foreign observers have noted that women shared equally with men 
in farm labor. Overall, women were providing more labor than 
men in all sectors of the economy. Less than 4 percent of the total 
female work force was unemployed, compared with nearly 10 per- 
cent of men who had no occupation. 

The government founded the National Women's Association of 
Bhutan in 1981 primarily to improve the socioeconomic status of 
women, particularly those in rural areas. The association, at its 
inaugural session, declared that it would not push for equal rights 
for women because the women of Bhutan had already come to "en- 
joy equal status with men politically, economically, and socially." 
To give prominence to the association, the Druk Gyalpo's sister, 
Ashi Sonam Chhoden Wangchuck, was appointed its president. 
Starting in 1985, the association became a line item in the govern- 
ment budget and was funded at Nu2.4 million in fiscal year (FY — 
see Glossary) 1992. The association has organized annual beauty 
contests featuring traditional arts and culture, fostered training in 
health and hygiene, distributed yarn and vegetable seeds, and in- 
troduced smokeless stoves in villages. 

Housing 

Bhutanese housing has a distinct character from that of other 
Himalayan countries. Relatively spacious compared with those of 



280 



Bhutan 



neighboring societies, houses took advantage of natural light and, 
because of the steep terrain, were usually built in clusters rather 
than in rows. Timber, stone, clay, and brick were typical construc- 
tion materials in upland Ngalop areas. Family residences frequentiy 
had three stories, with room for livestock on the first or ground 
story, living quarters on the second story, additional living quar- 
ters and storage on the third story, and an open space between 
the third story and the roof for open-air storage. Large stones were 
used to weigh down wooden roofs against fierce Himalayan storms. 
Among Buddhism's contributions to Bhutan were its rich architec- 
tural embellishments. The walls of residences and public buildings, 
inside and outside, were subject to colorful decoration, as were fur- 
niture, cupboards, stairs, window frames, doors, and fences. Wood- 
en shutters rather than scarce glass were used throughout the 1980s. 
Buddhist motifs and symbolic colors also were extensively used. 
Sharchop houses of stone and timber were sometimes built on hill- 
sides. In the southern areas inhabited by Nepalese, Assamese, and 
Bengalis, housing was more likely to consist of bamboo and thatched 
roof houses and mud and thatch dwellings. The construction of 
housing often was a cooperative task of the community. 

Festivals 

Bhutan has numerous public holidays, most of which center 
around traditional seasonal, secular, and religious festivals. They 
include winter solstice (around January 1 , depending on the lunar 
calendar), lunar new year (January or February), the Druk Gyal- 
po's birthday and the anniversary of his coronation, the official 
start of monsoon season (September 22), National Day (Decem- 
ber 17), and various Buddhist and Hindu celebrations. Even the 
secular holidays have religious overtones, including religious dances 
and prayers used to bless the day. 

Masked dances and dance dramas are common traditional fea- 
tures at festivals. Energetic dancers wearing colorful wooden or 
composition face masks employ special costumes and music to depict 
a panoply of heroes, demons, death heads, animals, gods, and 
caricatures of common people. The dances enjoy royal patronage 
and preserve not only ancient folk and religious customs but also 
perpetuate the art of mask making. 

Religious Tradition 

Buddhism 

Mahay ana Buddhism was the state religion, and Buddhists 
comprised about 70 percent of the population in the early 1990s. 



281 



Nepal and Bhutan: Country Studies 

Although originating from Tibetan Buddhism, Bhutanese Bud- 
dhism differs significantly in its rituals, liturgy, and monastic or- 
ganization. The state religion has long been supported financially 
by the government through annual subsidies to monasteries, 
shrines, monks, and nuns. In the modern era, support of the state 
religion during the reign of Jigme Dorji Wangchuck included the 
manufacture of 10,000 gilded bronze images of the Buddha, pub- 
lication of elegant calligraphied editions of the 108-volume Kanjur 
(Collection of the Words of the Buddha) and the 225-volume Tenjur 
(Collection of Commentaries), and the construction of numerous 
chorten (stupas) throughout the country. Guaranteed representation 
in the National Assembly and the Royal Advisory Council, Bud- 
dhists constituted the majority of society and were assured an in- 
fluential voice in public policy. 

In 1989 some 1,000 monks {lam, or gelong, novices) belonged to 
the Central Monastic Body in Thimphu and Punakha, and some 
4,000 monks belonged to district monastic bodies. The hierarchy 
was headed by the Je Khenpo, who was assisted by four lonpon or 
masters, each in charge of religious tradition, liturgy, lexicogra- 
phy, or logic. The lonpon, one of whom, the Dorji Lonpon, nor- 
mally succeeded the current Je Khenpo, had under them religious 
administrators and junior monastic officials in charge of art, music, 
and other areas. Gelugpa monks were celibate, but Nyingmapa 
monks were not so restricted and could marry, raise families, and 
work in secular occupations while performing liturgical functions 
in temples and homes. In all, there were some 12,000 monks in 
Bhutan in the late 1980s. There were also active congregations of 
nuns, but no figures were readily available. 

The majority of Bhutan's Buddhists are adherents of the Druk- 
pa subsect of the Kargyupa (literally, oral transmission) school, 
one of the four major schools of Tibetan Buddhism, which is itself 
a combination of the Theravada (monastic), Mahayana (messian- 
ic), and Tantrayana (apocalyptic) forms of Buddhism. Tibetan 
Buddhism holds that salvation can be achieved through the inter- 
cession of compassionate bodhisattvas (enlightened ones) who have 
delayed their own entry into a state of nibbana (see Glossary), or 
nirvana, enlightenment and selfless bliss, to save others. Empha- 
sis is put on the doctrine of the cosmic Buddha, of whom the histor- 
ical Buddha — Siddhartha Gautama (ca. 563-ca. 483 B.C.) — was 
only one of many manifestations. Bodhisattvas are in practice treat- 
ed more as deities than as enlightened human beings and occupy 
the center of a richly polytheistic universe of subordinate deities; 
opposing, converted, and reformed demons; wandering ghosts; and 
saintly humans that reflects the shamanistic folk religion of the 



282 



Bhutan 



regions into which Buddhism expanded. Tantrism contributed eso- 
teric techniques of meditation and a repertoire of sacred icons, 
phrases, gestures, and rituals that easily lent themselves to practi- 
cal (rather than transcendental) and magical interpretation. 

The Kargyupa school was introduced into Tibet from India and 
into Bhutan from Tibet in the eleventh century. The central teach- 
ing of the Kargyupa school is meditation on mahamudra (Sanskrit 
for great seal), a concept tying the realization of emptiness to free- 
dom from reincarnation. Also central to the Kargyupa school are 
the dharma (laws of nature, all that exists, real or imaginary), which 
consist of six Tantric meditative practices teaching bodily self-control 
so as to achieve nirvana. One of the key aspects of the Kargyupa 
school is the direct transmission of the tenets of the faith from teacher 
to disciple. The Drukpa subsect, which grew out of one of the four 
Kargyupa sects, was the preeminent religious belief in Bhutan by 
the end of the twelfth century (see Origins and Early Settlement, 
A.D. 600-1600, this ch.). 

Monasteries and convents were common throughout Bhutan in 
the late twentieth century. Both monks and nuns kept their heads 
shaved and wore distinguishing maroon robes. Their days were 
spent in study and meditation but also in the performance of rituals 
honoring various bodhisattvas, praying for the dead, and seeking 
divine intercession on behalf of the ill. Some of their prayers in- 
volved chants and singing accompanied by conch shell trumpets, 
thighbone trumpets (made from human thighbones), metal horns 
up to three meters long, large standing drums and cymbals, hand 
bells, temple bells, gongs, and wooden sticks. Such monastic music 
and singing, not normally heard by the general public, has been 
reported to have "great virility" and to be more melodious than 
its Tibetan monotone counterparts. 

To bring Buddhism to the people, numerous symbols and struc- 
tures are employed. Religious monuments, prayer walls, prayer 
flags, and sacred mantras carved in stone hillsides were prevalent 
in the early 1990s. Among the religious monuments are chorten, 
the Bhutanese version of the Indian stupa. They range from sim- 
ple rectangular "house" chorten to complex edifices with ornate steps, 
doors, domes, and spires. Some are decorated with the Buddha's 
eyes that see in all directions simultaneously. These earth, brick, 
or stone structures commemorate deceased kings, Buddhist saints, 
venerable monks, and other notables, and sometimes they serve 
as reliquaries. Prayer walls are made of laid or piled stone and in- 
scribed with Tantric prayers. Prayers printed with woodblocks on 
cloth are made into tall, narrow, colorful prayer flags, which are 
then mounted on long poles and placed both at holy sites and at 



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Nepal and Bhutan: Country Studies 

dangerous locations to ward off demons and to benefit the spirits 
of the dead. To help propagate the faith, itinerant monks travel 
from village to village carrying portable shrines with many small 
doors, which open to reveal statues and images of the Buddha, bo- 
dhisattavas, and notable lamas. 

Bon 

Before the introduction of Buddhism, animistic worship, gener- 
ally categorized as Bon in the Himalayas, was prevalent in Bhutan. 
The sun, moon, sky, and other natural elements were worshiped, 
and doctrine was transmitted orally from generation to generation. 
Bon, from a Tibetan word meaning invocation or recitation, has 
priests — bonpo — who perform exorcisms, burial rites, and divina- 
tions to tame threatening demons and to understand the wishes 
of the gods. Imported from Tibet and India, perhaps in the eighth 
century, Bon doctrine became so strongly reinvigorated by Bud- 
dhism that by the eleventh century it reasserted itself as an indepen- 
dent school apart from Buddhism. Conversely, Bon influenced 
popular Buddhism, infusing it with an appreciation for omens and 
demons felt to influence daily life profoundly. Bon established a 
canon of teachings and continued to be practiced in modern Bhutan. 

Hinduism and Islam 

The minority religion of Bhutan is Hinduism, whose 
adherents — those of Nepalese origin — officially constitute 28 per- 
cent of the population (see Hinduism, ch. 2). Despite Buddhism's 
status as the state religion, Hindus had de facto freedom of religion. 
The Druk Gyalpo decreed major Hindu festivals as national holi- 
days, and the royal family participated in them. An even smaller 
religious minority — about 5 percent of the population in 
1989 — practiced Islam. Although foreign religious personnel were 
permitted to work in Bhutan, primarily as educators, they were 
not allowed to proselytize. 

Education 

Western-style education was introduced to Bhutan during the 
reign of Ugyen Wangchuck (1907-26). Until the 1950s, the only 
formal education available to Bhutanese students, except for pri- 
vate schools in Ha and Bumthang, was through Buddhist monaster- 
ies. In the 1950s, several private secular schools were established 
without government support, and several others were established 
in major district towns with government backing. By the late 1950s, 
there were twenty-nine government and thirty private primary 
schools, but only about 2,500 children were enrolled. Secondary 



284 



The twelfth-century Chendibji chorten, a religious monument dominated 

by the Buddha's all-seeing eyes 
Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

education was available only in India. Eventually, the private 
schools were taken under government supervision to raise the qual- 
ity of education provided. Although some primary schools in re- 
mote areas had to be closed because of low attendance, the most 
significant modern developments in education came during the peri- 
od of the First Development Plan (1961-66), when some 108 schools 
were operating and 15,000 students were enrolled (see Role of the 
Government, this ch.). 

The First Development Plan provided for a central education 
authority — in the form of a director of education appointed in 
1961 — and an organized, modern school system with free and 
universal primary education. Since that time, following one year 
of preschool begun at age four, children attended school in the 
primary grades — one through five. Education continued with the 
equivalent of grades six through eight at the junior high level and 
grades nine through eleven at the high school level. The Depart- 
ment of Education administered the All-Bhutan Examinations na- 
tionwide to determine promotion from one level of schooling to 
the next. Examinations at the tenth- grade level were conducted 
by the Indian School Certificate Council. The Department of Edu- 
cation also was responsible for producing textbooks; preparing 



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Nepal and Bhutan: Country Studies 

course syllabi and in-service training for teachers; arranging training 
and study abroad; organizing interschool tournaments; procuring 
foreign assistance for education programs; and recruiting, testing, 
and promoting teachers, among other duties. 

The core curriculum set by the National Board of Secondary 
Education included English, mathematics, and Dzongkha. Although 
English was used as the language of instruction throughout the 
junior high and high school system, Dzongkha and, in southern 
Bhutan until 1989, Nepali, were compulsory subjects. Students also 
studied English literature, social studies, history, geography, general 
science, biology, chemistry, physics, and religion. Curriculum de- 
velopment often has come from external forces, as was the case 
with historical studies. Most Bhutanese history is based on oral tra- 
ditions rather than on written histories or administrative records. 
A project sponsored by the United Nations Education, Scientific, 
and Cultural Organization (UNESCO) and the University of Lon- 
don developed a ten-module curriculum, which included four 
courses on Bhutanese history and culture and six courses on Indi- 
an and world history and political ideas. Subjects with an immediate 
practical application, such as elementary agriculture, animal hus- 
bandry, and forestry, also were taught. 

Bhutan's coeducational school system in 1988 encompassed a 
reported 42,446 students and 1,513 teachers in 150 primary schools, 
11,835 students and 447 teachers in 21 junior high schools, and 
4,515 students and 248 teachers in 9 high schools. Males account- 
ed for 63 percent of all primary and secondary students. Most 
teachers at these levels — 70 percent — also were males. There also 
were 1,761 students and 150 teachers in technical, vocational, and 
special schools in 1988. 

Despite increasing student enrollments, which went from 36,705 
students in 1981 to 58,796 students in 1988, education was not com- 
pulsory. In 1988 only about 25 percent of primary-school-age chil- 
dren attended school, an extremely low percentage by all standards. 
Although the government set enrollment quotas for high schools, 
in no instance did they come close to being met in the 1980s. Only 
about 8 percent of junior high- school- age and less than 3 percent 
of high-school-age children were enrolled in 1988. 

Bhutan's literacy rate in the early 1990s, estimated at 30 per- 
cent for males and 10 percent for females by the United Nations 
Development Programme (UNDP), ranked lowest among all least 
developed countries. Other sources ranked the literacy rate as low 
as 12 to 18 percent. 

Some primary schools and all junior high and high schools were 
boarding schools. The school year in the 1980s ran from March 



286 



Bhutan 



through December. Tuition, books, stationery, athletic equipment, 
and food were free for all boarding schools in the 1980s, and some 
high schools also provided clothing. With the assistance of the World 
Food Programme of the Food and Agriculture Organization of the 
United Nations (FAO), free midday meals were provided in some 
primary schools. 

Higher education was provided by Royal Bhutan Polytechnic 
just outside the village of Deothang, Samdrup Jongkhar District, 
and by Kharbandi Technical School in Kharbandi, Chhukha Dis- 
trict. Founded in 1973, Royal Bhutan Polytechnic offered courses 
in civil, mechanical, and electrical engineering; surveying; and 
drafting. Kharbandi Technical School was established in the 1970s 
with UNDP and International Labour Organisation assistance. 
Bhutan's only junior college — Sherubtse College in Kanglung, 
Tashigang District — was established in 1983 as a three-year degree- 
granting college affiliated with the University of Delhi. In the year 
it was established with UNDP assistance, the college enrolled 278 
students, and seventeen faculty members taught courses in arts, 
sciences, and commerce leading to a bachelor's degree. Starting 
in 1990, junior college classes also were taught at the Yanchen- 
phug High School in Thimphu and were to be extended to other 
high schools thereafter. 

Education programs were given a boost in 1 990 when the Asian 
Development Bank (see Glossary) granted a US$7. 13 million loan 
for staff training and development, specialist services, equipment 
and furniture purchases, salaries and other recurrent costs, and 
facility rehabilitation and construction at Royal Bhutan Poly- 
technic. The Department of Education and its Technical and 
Vocational Education Division were given a US$750,000 Asian 
Development Bank grant for improving the technical, vocational, 
and training sectors. The New Approach to Primary Education, 
started in 1985, was extended to all primary and junior high schools 
in 1990 and stressed self-reliance and awareness of Bhutan's unique 
national culture and environment. 

Most Bhutanese students being educated abroad received tech- 
nical training in India, Singapore, Japan, Australia, New Zealand, 
Britain, Germany, and the United States. English-speaking coun- 
tries attracted the majority of Bhutanese students. The vast majority 
returned to their homeland. 

Health 

Bhutan's health-care development accelerated in the early 1960s 
with the establishment of the Department of Public Health and the 
opening of new hospitals and dispensaries throughout the country. 



287 



Nepal and Bhutan: Country Studies 

By the early 1990s, health care was provided through some twenty- 
nine general hospitals (including five leprosy hospitals, three army 
hospitals, and one mobile hospital), forty-six dispensaries, sixty- 
seven basic health units, four indigenous-medicine dispensaries, 
and fifteen malaria eradication centers. The major hospitals were 
in Thimphu, Geylegphug, and Tashigang. Hospital beds in 1988 
totaled 932. There was a severe shortage of health-care personnel 
with official statistics reporting only 142 physicians and 678 para- 
medics, about one health-care professional for every 2,000 peo- 
ple, or only one physician for almost 10,000 people. Training for 
health-care assistants, nurses' aides, midwives, and primary health- 
care workers was provided at Thimphu General Hospital's Health 
School, which was established in 1974. Graduates of the school were 
the core of the national public health system and helped staff the 
primary care basic health units throughout the country. Additional 
health-care workers were recruited from among volunteers in vil- 
lages to supplement primary health care. 

The most common diseases in the 1980s were gastrointestinal 
infections caused by waterborne parasites, mostly attributable to 
the lack of clean drinking water. The most frequently treated dis- 
eases were respiratory tract infections, diarrhea and dysentery, 
worms, skin infections, malaria, nutritional deficiencies, and con- 
junctivitis. In 1977 the World Health Organization (WHO) 
declared Bhutan a smallpox-free zone. In 1979 a nationwide im- 
munization program was established. In 1987, with WHO sup- 
port, the government envisioned plans to immunize all children 
against diphtheria, pertussis, tetanus, polio, tuberculosis, and 
measles by 1990. The government's major medical objective by 
2000 was to eliminate waterborne parasites, diarrhea and dysen- 
tery, malaria, tuberculosis, pneumonia, and goiter. Progress in 
leprosy eradication was made in the 1970s and 1980s, during which 
time the number of patients had decreased by more than half, and 
by 1988 the government was optimistic that the disease could be 
eliminated by 2000. 

It was estimated in 1988 that only 8 persons per 1,000 had ac- 
cess to potable water. Despite improved amenities provided to the 
people through government economic development programs, Bhu- 
tan still faced basic health problems. Factors in the country's high 
morbidity and death rates included the severe climate, less than 
hygienic living conditions, for example long-closed-up living quar- 
ters during the winter, a situation that contributes to the high inci- 
dence of leprosy, and smoke inhalation from inadequately ventilated 
cooking equipment. Nevertheless, in 1980 it was estimated that 
90 percent of Bhutanese received an adequate daily caloric intake. 



288 



Bhutan 



Although there were no reported cases of acquired immune defi- 
ciency syndrome (AIDS), the Department of Public Health set up 
a public awareness program in 1987. With the encouragement of 
the WHO, a "reference laboratory" was established at the Thim- 
phu General Hospital to test for AIDS and human immunodefi- 
ciency virus (HIV) as a precautionary measure. To further enhance 
awareness, representatives of the National Institute of Family 
Health were sent to Bangladesh in 1990 for training in AIDS aware- 
ness and treatment measures. 

The Economy 

The Economic Context 

Bhutan, recognized by international aid agencies as one of the 
poorest of the least developed countries of the world, had a primarily 
subsistence agricultural economy in the early 1990s. In the late 
1980s, around 95 percent of the work force was involved in the 
agricultural sector (agriculture, livestock, forestry and logging, and 
fishing). The government projected that the agriculture sector would 
produce 46.2 percent of the nation's gross domestic product 
(GDP — see Glossary) for 1991, representing a decade-long slight 
decline as government services and electric power generation in- 
creased. Manufacturing and construction, although important, were 
expected to contribute only 14.2 percent of the projected total GDP 
(nearly Nu4.1 billion) for 1991 (see table 24, Appendix). The gross 
national product (GNP — see Glossary) was nearly Nu3.9 billion 
in 1988, and in the same year, the GDP had risen to Nu3.4 billion 
(see table 25, Appendix). The World Bank (see Glossary) calcu- 
lated Bhutan's 1989 per capita GNP, based on revised population 
estimates (600,000 persons), at US$440. 

Despite these seemingly bleak economic indicators, the actual 
quality of life was comparatively better than that of countries to 
the north and south. World Bank analysts believed the numbers 
were low because of inaccurate population estimates and differ- 
ences in measuring subsistence output and barter transactions, as 
well as the difficulties in reconciling the differences between fiscal- 
year and calendar-year accounts. Nutritional intakes, and the avail- 
ability of housing, land, livestock, and fuel, all pointed to higher 
per capita income. And, when measured in 1980 constant prices, 
according to Bhutanese government statistics, the economy ex- 
perienced a highly respectable 8.8 percent annual growth rate dur- 
ing the 1980s. 

Although Bhutan has a minuscule private sector, it was grow- 
ing in the late twentieth century in conjunction with government 



289 



Nepal and Bhutan: Country Studies 

development plans. It was controlled, however, by a small sector 
of society, members of the royal family, and individuals or fami- 
lies with government ties. The Companies Act of 1989 provided 
for the separation of all public and joint sector corporations from 
the civil service by mid- 1990, and, as a result, certain key enter- 
prises became independent of the government. 

Role of the Government 

Planning and Reform 

Government played a pervasive role in Bhutan's economy. Since 
1961 the economy has been guided through development plans, 
which the Development Secretariat and later the Planning Com- 
mission directed, subject to the National Assembly's approval. In 
the World Bank's 1989 appraisal, ' 'Coming late to the devel- 
opment scene, Bhutan was eager to avoid mistakes committed 
elsewhere. Although strongly dependent on foreign aid, it was de- 
termined to follow its own set of priorities, keep public finance on 
an even keel, build up a well trained but lean bureaucracy, and 
prevent environmental damage from overexploitation of the forests 
or uncontrolled growth of tourism." To help avoid further mis- 
takes, the government used traditional social institutions and in- 
volved people at the local level in planning and implementation 
for their own district, subdistrict, or village. 4 'As a result of these 
factors," said the World Bank, ' 'development in Bhutan has been 
remarkably free from seeing economic, social, or cultural dis- 
ruption." 

India fully funded the First Development Plan (1961-66). The 
first plan, for which Nu 10 7. 2 million was allocated, and the Sec- 
ond Development Plan (1966-71), for which Nu202.2 million was 
allocated, focused primarily on developing modern budgeting tech- 
niques (see table 26, Appendix). According to some foreign ob- 
servers, the first two plans failed to set priorities and achieve 
economic-sector integration as might be expected of genuine de- 
velopment planning. The major economic-planning emphasis was 
on public works, primarily roads; forestry; health care; and edu- 
cation (see table 27, Appendix). 

To make planning more effective, the Planning Commission was 
established to formulate the Third Development Plan (1971-76), 
and the Druk Gyalpo served as its chairman until 1991. Under 
the third plan, public works, still primarily roads, continued to take 
a significant share of the Nu475.2 million development budget (17.8 
percent) but had decreased from its 58.7 percent share in the first 
plan and its 34.9 percent share in the second plan. Education 



290 



Bhutan 



gradually increased (from 8.8 to 18.9 percent) in the first three 
plans. The second and third plans were paid for primarily by In- 
dia, although about 3 percent of total funding became available 
through the UN, starting with the third plan. Despite amounts 
budgeted for planned development, there were additional capital 
expenditures outside the formal development plan, including public 
works (mostly road construction) and hydroelectric plants. 

One of the major achievements of the Fourth Development Plan 
(1976-81) was the establishment of district (or dzongkhag) planning 
committees to stimulate greater local involvement, awareness of 
government development policies, and local development proposals. 
The committees, however, had no decision-making powers. 
Nevertheless, agricultural and animal husbandry came to the fore, 
taking 29 percent of the Nu 1.106 billion allocated for the fourth 
plan. It was during the fourth plan that Bhutan made its first effort 
to establish the value of the GDP, which in 1977 amounted to Nul .0 
billion. In that year, GDP was distributed among agricultural and 
related activities, 63.2 percent; services, 13.1 percent; government 
administration, 10.4 percent; rental income, 8.1 percent; and 
manufacturing and mining, 5.2 percent. Per capita GDP was es- 
timated at US$105. 

The Fifth Development Plan (1981-87) sought the expansion of 
farmland to increase the production of staple crops, such as rice, 
corn, wheat, barley, buckwheat, and millet. The plan also empha- 
sized improvements in livestock, soil fertility, plant protection, and 
farm mechanization. Its total planned allocation was Nu4.3 bil- 
lion, but the actual outlay came to Nu4.7 billion. Financing the 
planning process grew increasingly complex, as indicated by the 
fifth plan's multilateral funding sources. However, domestic 
revenue sources for development planning had increased signifi- 
cantly, and the fifth plan included development projects that would 
further decrease dependence on external assistance. Such concepts 
as self-reliance in each district, decentralization of the development 
administration, greater public input in decision making, better con- 
trol of maintenance expenditures, and more efficient and effective 
use of internal resources became increasingly important. 

The Sixth Development Plan (1987-92) focused on industry, 
mining, trade, and commerce (13.3 percent) and power genera- 
tion projects (13.1 percent), with education's allocation decreas- 
ing slightly to 8. 1 percent from 11.2 percent during the fifth plan. 
At Nu9.5 billion, the sixth plan was considerably more expensive 
than its predecessor. It included programs that, if successfully im- 
plemented, would mean far-reaching reforms. The goals included 
strengthening government administration, promoting the national 



291 



Nepal and Bhutan: Country Studies 

identity, mobilizing internal resources, enhancing rural incomes, 
improving rural housing and resettlement, consolidating and im- 
proving services, developing human resources, promoting public 
involvement in development plans and strategies, and promo- 
ting national self-reliance. Perhaps the key ingredient, self-reliance, 
promised to provide for more popular participation in the devel- 
opment process and to result in improved rural conditions and 
services as well as better government administration and human- 
resource development. With greater self-reliance, it was hoped that 
Bhutan would begin exploiting markets in neighboring countries 
with manufacturing, mining, and hydroelectric projects in the 
1990s. Faced with rising costs, Bhutan postponed some projects 
requiring large inputs of capital until the Seventh Development 
Plan (1992-96). 

No major changes were expected in overall sectoral development 
in the seventh plan. Preliminary planning indicated emphasis on 
"consolidation and rehabilitation" of developments achieved un- 
der previous plans, more attention to environmental concerns, and 
enhancement of women's role in economic and social development. 

From their inception, the development plans have been aimed 
at energizing the rest of the economy and promoting economic self- 
reliance. Windfall revenues from export receipts normally were used 
to reduce foreign debt and dependence on foreign aid. Planners 
also sought to involve the immediate beneficiaries of economic de- 
velopment. Representatives in the National Assembly and district 
officials were encouraged to become involved in projects, such as 
roads and bridges, schools, health-care facilities, and irrigation 
works, in their district. Some costs for the projects were borne 
through self-help, such as households providing labor. Government 
planners also have endeavored to increase rural income through 
initiatives in the farming sector, such as stock-breeding programs, 
promotion of cash crops, and advanced agro- technology. Central 
government efforts also were aimed at increasing the quality of life 
by providing electrification, modern water and sanitation systems, 
better cooking equipment, and insulation for houses. 

Budgets 

Key to the budgetary process since 1949 has been the annual 
subsidy given to Bhutan by the Indian government. In the late 
1980s, the subsidy stood at 40 percent of total revenue, but this 
proportion was significantly less than the nearly 100 percent New 
Delhi once provided. The rest was funded by international aid or- 
ganizations and a few domestic sources. 



292 



Weaving on a backstrap loom, an important home industry 
Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

During most of the 1980s, the budget ran a deficit. Only in 1984, 
out of the four years between 1983 and 1986, did government 
revenues exceed expenditures, and revenues depended heavily on 
foreign aid. In other years, revenue shortfalls reached as much as 
Nu207 million (in 1985). In FY 1989, Bhutan's revenues of near- 
ly Nul.7 billion (US$99 million) were exceeded by expenditures 
of nearly Nu2.2 billion (US$128 million, of which US$65 million 
were for capital expenditures). 

Monetary System 

The monetary system in the early 1990s was based on the 
decimal-system ngultrum, which was established as the nation's 
currency and first used to keep financial accounts in 1974. Prior 
to 1957, a nondecimal system using both Indian and Bhutanese 
rupees was employed, and the decimal-based rupee was the stan- 
dard currency between 1957 and 1974. Since at least the eighteenth 
century, Bhutan had had its own coinage system, and the Indian 
rupee also freely circulated as a medium of exchange. Until the 
1960s, however, most financial transactions were carried out us- 
ing barter arrangements. Although Indian rupee notes were used 
extensively, in 1971 the government had to withdraw some 350,000 
tikchung (a Bhutanese coin worth half a rupee) from circulation 



293 



Nepal and Bhutan: Country Studies 

because of the inconvenience of using them in large financial trans- 
actions. In 1991 the Indian rupee continued to be legal tender in 
Bhutan, and the ngultrum was at par with it. The Reserve Bank 
of India determined the exchange rate between the ngultrum and 
other foreign currencies. External transactions were handled by 
Bhutan's Ministry of Finance, which provided foreign exchange 
for most currency and capital transactions. The ministry also had 
approval authority over all capital transactions. Starting in 1985, 
the ministry delegated most foreign-exchange transactions to the 
Royal Monetary Authority. 

Banking and Credit 

The Royal Monetary Authority, since its establishment in 1982, 
has served as the central bank of Bhutan and maintained its head- 
quarters in Thimphu. The authority was responsible for issuing 
currency, implementing monetary policy, coordinating financial 
institution activities, and holding the government's foreign- 
exchange earnings. Among its initial duties was the administra- 
tion of financial assistance to rural development, a duty later 
delegated to the Bhutan Development Finance Corporation when 
it was founded in 1988. 

The Bank of Bhutan, the nation's commercial bank, was estab- 
lished in 1968 as a joint venture with the Chartered Bank of In- 
dia, which owned 25 percent of the bank. In 1970 the State Bank 
of India took over the Bhutanese assets controlled by the Char- 
tered Bank of India. Since its establishment, the Bank of Bhutan's 
board of directors, has been composed of key officials from the eco- 
nomic ministries and departments and two officials from the Indi- 
an banks. The bank was restructured in 1971. To ensure that it 
would have sufficient funds at its disposal, government departments 
were required to deposit all of their accounts with the government- 
run bank until 1982, when the Royal Monetary Authority was es- 
tablished. Since 1982 the Bank of Bhutan has served as the retail 
banking agent for the Royal Monetary Authority. The bank's prin- 
cipal office was in Phuntsholing; in 1991 there were twenty-six 
branch offices throughout the country. The Bank of Bhutan was 
able to give relatively large loans for capital programs, such as ir- 
rigation projects in the south-central region. Among its retail bank- 
ing activities was the issuance of rupee-denomination travelers' 
cheques; this activity was started in 1974. 

The Bhutan Development Finance Corporation, upon its estab- 
lishment in 1988, took over the administration of rural financial 
assistance from the Royal Monetary Authority. Loans were granted 



294 



Bhutan 



for improving farmlands, acquiring livestock, and meeting short- 
term, seasonal requirements. At least some of the funding for the 
corporation came from the Asian Development Bank, including 
an initial US$2.5 million loan in 1988 for the expansion of small - 
and medium-sized, private- sector industrial development. By 1991 
the corporation had been privatized. 

Nonbank financial institutions also were set up as part of the 
economic modernization process. Insurance was offered by the Roy- 
al Insurance Corporation of Bhutan, which was established in 1975 
with its headquarters in Phuntsholing. Starting in 1980, individu- 
als could invest their savings in the newly established Unit Trust 
of Bhutan. The trust, with its main office in Phuntsholing, chan- 
neled invested funds, for which it issued shares called units, into 
industrial and commercial development. The Government Em- 
ployees' Provident Fund, established in 1986; the Bhutan Develop- 
ment Finance Corporation; and other nonbank institutions were 
small and constrained by the rudimentary use of money in the 
economy. 

Government- Owned Corporations 

The government owned several trading corporations. The Food 
Corporation of Bhutan in Phuntsholing was involved in retailing, 
marketing, storage, importing and exporting agricultural products, 
regulating agricultural commerce and processing, and managing 
rural finance through loans from the Bank of Bhutan and the Royal 
Insurance Corporation. The National Commission for Trade and 
Industry in Thimphu provided quality control for proposed indus- 
trial projects, and the State Trading Corporation of Bhutan in 
Phuntsholing was the government's import and export manage- 
ment agency. 

Foreign Economic Relations 

Aid 

Whereas Bhutan was once nearly totally dependent on India not 
only for its development assistance but also for its entire govern- 
ment revenue, it increasingly turned to various international or- 
ganizations, such as the United Nations, the Colombo Plan, the 
World Bank, and the Asian Development Bank, for loans. Since 
the 1960s, Bhutan, through the Colombo Plan, has received aid 
from several countries in the form of farm machinery, motor ve- 
hicles, school books and laboratory equipment, livestock, seeds, 
dairy equipment, medicine, and refrigeration and irrigation sys- 
tems. Participating countries included Japan, Australia, New 



295 



Nepal and Bhutan: Country Studies 

Zealand, Britain, Austria, Switzerland, West Germany, and Cana- 
da. The World Bank granted a US$9 million interest-free loan to 
help with the development of a calcium carbide plant near Phunt- 
sholing. As of 1990, total Asian Development Bank loans to Bhu- 
tan since the latter joined in 1982 amounted to US$30 million. In 
1987 and 1988 alone, the bank approved loans totalling more than 
US$6.9 million to cover the modernization of industrial estates and 
to provide foreign currency for the Bhutan Development Finance 
Corporation, which in turn provided credit for agricultural projects 
and private-sector businesses. Asian Development Bank loans to 
Bhutan for 1990-93 were projected at US$35 million, plus a grant 
of more than US$4.85 million; the aid was for technical assistance. 

The Sixth Development Plan saw increased involvement of aid 
both through UN auspices and the non-profit Swiss organization 
Helvetas (Swiss Association for Technical Assistance). Helvetas be- 
gan providing funding to Bhutan in 1975 through contributions 
from association members and the Swiss government. In 1990, for 
example, Helvetas contributed Nu32.8 million (69 percent of to- 
tal foreign aid) to establish the Natural Resources Training Insti- 
tute, a two-year technical training school. The Japanese government 
gave Nu74 million in grants for agricultural development and au- 
dio training equipment in 1990-91. 

In 1989 the World Food Programme approved a two-year 
US$700,000 project to establish food reserves that would help Bhu- 
tan handle local emergencies and interruptions of food supplies. 
The FAO sponsored a program to assist Bhutan in achieving food 
self-sufficiency by 1992. 

Another form of aid received by Bhutan was through interna- 
tional and foreign volunteer programs. A UN volunteer program 
initiated in 1980 brought foreign specialists in to assist and advise 
in the areas of education, health, engineering, animal husbandry, 
agriculture, and urban planning. By 1990 Japan, New Zealand, 
Britain, and Canada also were operating volunteer programs in 
Bhutan. 

In addition to the substantial aid it received, Bhutan was itself 
an aid giver. For example, in 1987 Bhutan provided disaster relief 
aid to Maldives (Nul million), Bangladesh (Nu0.5 million), and 
India (Nu5 million). 

Foreign Debt 

At the start of the 1980s, Bhutan's external debt was small, but 
as the decade progressed it increased significantly. Whereas it stood 
at US$2.7 million in 1984, the debt jumped to US$21 million in 
1985 and reached US$70. 1 million in 1989. Although efforts have 



296 



Bhutan 



been made to reduce dependence on foreign aid inputs, an increas- 
ing amount of aid, other than that received from India, has been 
in the form of loans rather than outright grants. Whereas Bhutan 
had no foreign debt outside of India in the early 1980s, by the mid- 
to-late 1980s, loans — primarily from the World Bank and the Asian 
Development Bank — comprised 30 percent of foreign assistance and 
represented about 17 percent of its GDP. 

Trade 

Traditionally, most foreign trade was with Tibet. By 1960, 
however, following the closing of the Bhutan-China border and 
the development of closer ties with India, formal trade with India 
replaced that with Tibet. Although banned by the Bhutan govern- 
ment by 1961, barter trade with Tibet has persisted. Since 1960 
nearly all of Bhutan's exports (93 percent in 1989) and the majori- 
ty of its imports (67 percent in 1989) have been with India (see 
table 28, Appendix). Payments for imports in the 1980s were usually 
made with Indian rupees. There were no import duties on Indian 
imports, and, in accordance with the 1949 friendship treaty be- 
tween Bhutan and India, there was duty-free transit of imports from 
other countries (see Foreign Relations, this ch.). 

Both imports and exports increased steadily during the 1980s, 
from a total of Nu805.9 million in 1983 to more than Nu2.9 bil- 
lion in 1990 (see table 29, Appendix). The balance of trade also 
improved as the decade progressed. In 1983, for example, only 20 
percent of trade was in exported goods, whereas 80 percent was 
imports; this negative trade balance improved markedly by 1990, 
however, when exports accounted for 40.2 percent and imports for 
59.8 percent of foreign trade (see table 30, Appendix). Although 
there was little trade with the United States, in recognition of its 
economic status Bhutan was granted an exemption in 1985 from 
the competitive trade requirements provided by the United States' 
Generalized System of Preferences. 

Exports, which reached almost Nul.2 billion in 1990, consisted 
primarily of cement, talc, fruit (mostly oranges) and fruit products, 
alcoholic beverages, resin, cardamom, lumber products, potatoes, 
and handicrafts. Although most trade was with India, such special- 
ties as timber, cardamom, and liquor were exported to Bangladesh, 
Singapore, and countries in the Middle East and Western Europe. 
The opening of thirteen border crossings with customs facilities for 
Bhutan's exports and imports also eased trade with Nepal and Ban- 
gladesh. An increasingly important export to India was surplus pow- 
er from Bhutan's Chhukha Hydel Project, which earned Bhutan 



297 



Nepal and Bhutan: Country Studies 

Nu22.3 million in FY 1988; that figure increased to nearly Nu399 
million only two years later. 

Imports amounted to nearly Nul.8 billion in 1990. They con- 
sisted of raw materials; textiles; cereals; fuel; investment goods, 
including motor vehicles; and other consumer goods, primarily from 
India. 

Agriculture 

Bhutan was traditionally self-sufficient in food production. Most 
of Bhutan's citizens and a significant amount of its GDP were devot- 
ed to the agricultural sector in the late 1980s. About 87 percent 
of the population was involved in agriculture, and a projected 30.5 
percent of GDP was expected to be produced through farming, 
animal husbandry, and fishing in 1991. Most agriculture was car- 
ried out with traditional methods and at the subsistence level. Faced 
with constraints of a shortage of cultivable and pasture land, lack 
of technical knowledge, logistical difficulties, and a shortage of 
skilled labor and managerial expertise, agricultural development 
was difficult. Grain production had not met demand, and imports 
were rising in the late 1980s. Shortages of feed contributed to low 
livestock productivity. Cash crops, such as oranges, apples, and 
cardamom, were significant, but they produced too little income 
to influence the overall economy. Government interest in agricul- 
ture was ensured during the First Development Plan (1961-66), 
with the establishment of agriculture and animal husbandry de- 
partments to oversee model farms, research, and crop and herd 
improvement, a trend which continued through subsequent de- 
velopment plans. 

Farming 

Crop farming was projected to produce 20.3 percent of GDP 
in 1991 . Only about 15 percent of Bhutan's extremely mountainous 
land was arable, and less than 6 percent was under permanent cul- 
tivation. Because rainfall and temperatures changed radically from 
one valley to the next, there were significant variations in the kinds 
of crops that were raised in neighboring communities. Most farms 
were small, with 90 percent of nearly 65,000 landholders having 
less than five hectares. Nearly 50 percent of those farms used ter- 
raced cultivation; another 18 percent were in valleys. Although 
banned by the government, tsheri cultivation accounted for 32 per- 
cent of the agricultural land use and about 3 percent of the total 
land in the early to mid-1980s. 

The major cereal crops in the 1980s were corn, rice, wheat and 
barley, buckwheat, and millet. Other major annual crops were 



298 



Threshing rice 

Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

potatoes, chilies, vegetables, soyabeans, pulses, and mustard. Hor- 
ticultural crops included oranges, apples, and cardamom. Corn 
and rice were by far the most prevalent crops, producing 81,000 
tons and 80,000 tons, respectively, in 1988. In the same year, a 
total of 51,000 tons of oranges, 50,000 tons of potatoes, 16,000 
tons of wheat, 7,000 tons of millet, 4,000 tons of barley, and 4,000 
tons of apples were produced. Total cereal production, however, 
only increased from 154,000 tons in 1979 to 205,000 tons in 1987. 

Despite increases in paddy production, with 26,000 hectares un- 
der cultivation in 1989, rice was imported. Bhutan had once been 
an exporter of rice to Tibet, but its growing urban population plus 
the nonfarm immigrant and migrant population put a severe con- 
straint on previous self-sufficiency in rice production. With a total 
cereal demand of 200,000 tons by 1987, some 20,000 tons of rice 
and 12,000 tons of wheat were being imported from India annual- 
ly. Nonfood crops, such as jute, which was produced by fewer than 
2 percent of Bhutan's farmers, also were grown. A small amount 
of tobacco was produced, with a reported crop of 100 tons in 1987, 
the same amount produced annually for nearly a decade. 

Animal Husbandry 

The most common livestock types traditionally and in the late 



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Nepal and Bhutan: Country Studies 

1980s, in order of numbers of head, were cattle, poultry, pigs, goats, 
sheep, yaks, and horses. Buffaloes, donkeys, and mules also were 
raised. Although all types of livestock were raised throughout the 
country, cattle tended to predominate in the east and south, horses 
in the east, yaks and pigs in the west, and goats and poultry in 
the south. Milk production stood at 31,000 tons in 1987. Develop- 
ment priorities under the Sixth Development Plan included livestock 
crossbreeding, improved animal health care, increased individual 
land ownership, and a better balance between herd size and feed 
availability. As a result of these efforts, livestock production in- 
creased modestly from 5,000 tons of beef, veal, pork, mutton, and 
lamb in 1980 to 7,000 tons annually by 1987. 

Fisheries 

A less productive but still significant food source resulted from 
fishing, both from cold-water streams and lakes (primarily trout) 
and warm-water fisheries (primarily carp). A growing demand for 
fish as a dietary supplement was reported in the mid-1970s follow- 
ing a 1974 FAO aquaculture study and a 1976 FAO survey of rivers 
and lakes to determine the level of fish stock. Fisheries were devel- 
oped, and carp were imported from Assam. In 1977 the Depart- 
ment of Animal Husbandry established a Fishery Development 
Programme, initially for stocking rivers with game fish and for de- 
veloping commercial capability as a long-term goal. Between 1979 
and 1987, an average of 1 ,000 tons of fish were caught or produced 
annually. Another FAO survey was conducted in 1981, and the 
government included fishery development for the first time in the 
Fifth Development Plan. The Integrated Fisheries Development 
Project was started at Geylegphug in 1985. The National Warm 
Water Fish Culture Centre supplied fish to farmers, and some 
twenty-one tons of carp were produced at fisheries for local and 
national consumption. To control cold-water fishing, the Depart- 
ment of Forestry issued fishing licenses and enforced seasonal and 
fish-size prohibitions. 

Irrigation and Fertilization 

Through the Bank of Bhutan, the government helped finance 
irrigation projects in south-central Bhutan. By 1986 some 350 kilo- 
meters of new irrigation channels had been constructed, and another 
395 kilometers of old channels had been repaired. Irrigation, 
however, was of only limited applicability because of the terrain. 
More attention was needed for rainfed crops, such as potatoes, 
wheat, and corn, than for rice and cash crops in irrigated areas. 

Fertilizer use was limited. Although nitrogenous fertilizers were 



300 



Bhutan 



used at a rate of 100 tons a year and phosphate and potash fertiliz- 
ers were used in indeterminant amounts throughout the 1980s, they 
were not a major agricultural factor. 

Forestry 

One of Bhutan's significant natural resources in the late twen- 
tieth century was its rich forests and natural vegetation. Bhutan's 
location in the eastern Himalayas, with its subtropical plains and 
alpine terrain, gives it more rainfall than its neighbors to the west, 
a factor gready facilitating forest growth. The forests contain numer- 
ous deciduous and evergreen species, ranging from tropical hard- 
woods to predominantly oak and pine forests. 

The small population and the general absence of overdevelop- 
ment in Bhutan contributed to forest preservation. Because of the 
terrain, the more accessible forests had been overcut whereas re- 
mote forests remained largely in their natural state. A progressive 
government-sponsored forestry conservation policy strove to balance 
revenue needs with ecological considerations, water management, 
and soil preservation. Success in managing its forest resources had 
long been critical to the local environment and economy and also 
affected downstream floodplains in India and Bangladesh. 

The Department of Forestry was established in 1952 to oversee 
conservation and exploitation of the country's significant forestry 
resources. After an initial decade of development, forestry-resource 
exploitation increased with the start of the First Development Plan 
in 1961 . Uncontrolled felling of trees in the 1970s by private com- 
panies in logging areas and by rural populations along roads and 
in main valleys stripped hillsides and caused serious erosion. Tsheri 
cultivation, forest fires, and overgrazing also contributed to the 
degradation of the forestry resource. 

In 1971 the Forestry School was established at Kalikhola in 
southern Bhutan. It was moved to Taba in the northern Thimphu 
Valley in 1977. The school provided basic instruction in forestry 
and forest management and trained foresters and Forest Guards 
(see Paramilitary, this ch.). 

In 1981 some 3.3 million hectares, or between 70 and 74 per- 
cent of the land, were forested, but in 1991 foreign estimates indi- 
cated a shrinking forest of only 60 to 64 percent of the land. Even 
more conservative estimates indicated that closer to 50 percent of 
Bhutan's territory still was forested in the late 1980s, and about 
15 percent of GDP was produced through the nation's important 
forest industry. 

According to UN statistics, in the decade between 1978 and 1987 
Bhutan harvested an average of nearly 3.2 million cubic meters 



301 



Nepal and Bhutan: Country Studies 

of roundwood and produced 5,000 cubic meters of sawn wood per 
year. Of this total, nearly 80 percent was for commercial use (paper 
pulp, veneers, plywood, particle board, and firewood), and the re- 
mainder was for housing construction and public works. 

Before hydroelectric power and other modern energy sources were 
available, wood was the almost exclusive source of fuel for heat- 
ing, cooking, and lighting. The provision of electricity, as well as 
better regulation of fuelwood collectors and more aggressive 
reforestation projects, was seen in the 1980s as a key factor in forest 
conservation. Because affordable electricity was not available 
throughout the country, the government established fuelwood plan- 
tations near villages to accommodate daily needs and to promote 
forest conservation. 

Recognizing the potential value of its forestry resource, Bhutan 
became increasingly conscientious about forestry management in 
the 1970s. Starting in 1977, the World Wildlife Fund began sup- 
porting Bhutan's forest management through organizing forest 
ranger training programs, supplying funds for forest boundary 
demarcation, building guard posts, and constructing a patrol road 
for what was later to be designated the Royal Manas National Park. 
Bhutan rejected World Bank aid to build a major dam on the Manas 
Chhu in 1986 that would have flooded this major conservation area 
on the southern Bhutan-India border. By 1989 Bhutan had devel- 
oped nine other forest and wildlife preserves, also mostly along the 
southern border with India. 

In the face of increasing denuded hillsides, private logging was 
banned, and strict standards for public-sector logging operations 
were established in 1979. Farmers were warned against burning 
off forests to clear land for tsheri cultivation, and Forest Guards 
were trained in increasing numbers to help preserve the valuable 
resources. Surveying, demarcation, conservation, and management 
plans for harvesting forest products were part of the Fifth Develop- 
ment Plan's focus on forestry preservation. Wildlife sanctuaries 
also were developed. One of the immediate results of forestry sec- 
tor regulation, however, was a sharp decrease in revenues since 
the late 1970s. In 1991 the government, with assistance from UNDP 
and the World Wildlife Fund, established a trust fund for environ- 
mental conservation. Initially in the amount of US$20 million, the 
UNDP -administered fund was aimed at producing up to US$1 mil- 
lion per year for training in forestry and ecology, surveying forests, 
reviewing and implementing management plans for protected areas, 
and supporting government environmental offices, public aware- 
ness programs, and integrated conservation and development 
programs. 



302 



Bhutan 



Industry, Mining, Energy, and Commerce 

Industry 

Only 1 percent or less of the work force was involved in indus- 
try and construction in the late 1980s, and industrial production 
and construction represented only 14.2 percent of GDP projected 
for 1991. Handicrafts, cement, food processing, wood milling, and 
distilling were the major industries. In the late 1980s, there about 
400 small-scale cottage and industrial units. There also were two 
cement plants under the Penden Cement Authority; a joint ven- 
ture (the government-sponsored Tashi Commercial Corporation 
in conjunction with the World Bank, Norway, and Kuwait), a Bhu- 
tan Carbide and Chemicals calcium carbide plant (near Phuntsho- 
ling), and factories for processing fruit, for manufacturing paper 
pulp, wood veneers, and particle board (Gedu Wood Manufac- 
turing Corporation and Bhutan Board Products), and for produc- 
ing resin and turpentine. Additionally, there were three distilleries 
and a salt iodization plant. Other small industrial enterprises 
manufactured such consumer goods as soap, confectionaries, and 
furniture. Most of the larger industries, established since Bhutan's 
economic modernization began in the 1960s, were themselves 
modern and used a considerable amount of labor-saving technol- 
ogy. The largest industries employed no more than sixty or seventy 
workers. Many of the newly developing industries began making 
public stock offerings in the late 1980s. 

Mining 

The mining and quarrying industry was projected to produce 
1.5 percent of GDP in 1991. Limestone — used in cement produc- 
tion — and clay were the major minerals being extracted in the 
mid-1980s. Mineral production also has included marble, dolomite, 
graphite, and slate. In addition, deposits of copper, gypsum, lead, 
tin, tungsten, zinc, coal, beryl, mica, pyrites, tufa, and talc have 
been found, primarily through an exploration program operated 
initially by the Geological Survey of India and, starting in 1982, 
in cooperation with the Geological Survey of Bhutan. Although 
not being exploited as much as other minerals, Bhutan's slate 
deposits have been described by experts as some of the best in the 
world. Bhutan's high-quality limestone deposits and energy 
resources were expected to take on increasing importance in the 
1990s because of the contributions they could make to the ferro- 
silicon industry, which the government hoped to invest in through 
Bhutan Carbide and Chemicals. 



303 



Nepal and Bhutan: Country Studies 
Energy 

Electricity and gas production was expected by the government 
to account for 10.7 percent of GDP in 1991. Hydroelectric power 
has long been a very important aspect of Bhutan's economic de- 
velopment as a low-cost energy source supporting more capital- 
intensive industries, such as forestry, mining, and cement and cal- 
cium carbide production. Bhutan's steep mountains, deep gorges, 
and fast-flowing rivers create abundant hydroelectric potential, 
which the government began to develop in the early 1960s with 
India's assistance. In 1981 Bhutan generated 22 million kilowatt- 
hours of energy from hydroelectric sources. A major plant in south- 
west Bhutan — the 18,000-kilowatt Jaldhaka hydroelectric plant — 
furnished electricity locally and exported the balance to India's West 
Bengal. The major expansion of hydroelectric facilities started in 
1975 on the Wang Chhu between Thimphu and Phuntsholing. 
Known as the Chhukha Hydel Project, it helped boost the nation's 
fledgling industrial development. The 336-megawatt Chhukha plant 
came on line in 1986 and was synchronized with the Indian grid 
that same year, and additional capacity became available in 1988. 
The Nu2.44 billion Chhukha project was 60 percent paid for by 
India and budgeted outside the normal development plan process. 
It was planned that Bhutan would sell at low cost all power to West 
Bengal that it did not consume itself. At the same cost, Bhutan 
also hoped to re-import some of that power through the Indian pow- 
er grid into southern districts. The Chhukha project was impor- 
tant not only because it supplied electric power to western and 
southern districts but also because it provided a major source of 
income for the government. The project's gross annual income was 
projected at Nu380 million in 1989. In 1989 nearly 95 percent of 
Bhutan's government-installed power generation — a total of 355 
megawatts — was supplied by Chhukha, and a total of some 20 prin- 
cipal towns and 170 villages had been electrified. By 1990 Thim- 
phu's commercial district had an underground cable system for 
its power supply. 

Besides the Chhukha project, government installations includ- 
ed seven minihydroelectric plants, each averaging 7,350 kilowatts 
capacity; twelve microhydroelectric plants, each averaging 340 
kilowatts capacity; and eight diesel-powered generation stations, 
each averaging 6,000 kilowatts capacity. Because domestic con- 
sumption was low (just over 16 megawatts, more than 80 percent 
of which was consumed by industry), ample power could be ex- 
ported to India. The project not only cut domestic electricity costs 
in half, but also revenues from electricity sold to India were nearly 



304 



Bhutan 



equal to the total government revenue from all domestic sources. 
Smaller enterprises, such as the 1.5-megawatt Gyetsha Mini-Hydel, 
which was inaugurated in 1989, brought badly needed power to 
Bumthang and was expected to provide additional power to neigh- 
boring districts by 1993. Another major plant, a proposed 60-mega- 
watt plant at Kurichu in eastern Bhutan, was included in the Sixth 
Development Plan (1987-92). 

Other sources of energy included biogas, which was used in some 
districts for lighting and cooking and was primarily generated from 
cow dung. Solar energy was used for a variety of purposes, including 
heating dwellings and greenhouses and lighting hospitals. Despite 
the potential solar energy that might be produced, Bhutan's moun- 
tainous terrain prevents maximum use. The same mountains are 
funnels for powerful winds, however, providing another viable 
renewable energy source. High- technology windmills were installed 
in Wangdiphodrang in 1987 to produce electricity to run irriga- 
tion pumps. 

Still another source of fuel in the 1980s was wood. Although 
Bhutanese had greater access to electric power than they had had 
previously, traditional methods of cooking and heating required 
readily available fuel. In the mid-1980s, Bhutan produced a coal 
equivalent of 982,000 tons of fuelwood per year to meet domestic 
needs. Coal itself was available in reserve in some 1.3 million tons, 
but recovery was difficult and the quality was poor. 

Commerce 

Commercial services were projected to generate 7.4 percent of 
GDP in 1991. Much of Bhutan's commerce revolved around tourist- 
oriented hotels and restaurants, and wholesale and retail trade made 
up the balance. The Bhutan Chamber of Commerce and Industry 
served as a formal conduit between government and private- sector 
businesses. The chamber was established with government sanc- 
tion and leadership in 1980, but it made a slow start. In 1984 the 
first meeting was held between chamber members and heads of 
government departments, and the Trade Information Centre was 
established as a unit of the Department of Trade and Commerce 
to provide trade and commercial information to both the public 
and private sectors. Despite these initiatives, the Bhutan Cham- 
ber of Commerce and Industry had to be reorganized in 1987; the 
intent was that the chamber would play a "vital role" in coor- 
dinating activities in the government and private sectors and pro- 
moting socioeconomic development. The Druk Gyalpo himself 
criticized the chamber in 1988 for its "extremely poor and disap- 
pointing performance" and urged it to take on a greater role in 



305 



Nepal and Bhutan: Country Studies 

national development and to help build a strong and dynamic econ- 
omy. Despite these initiatives, the Bhutan Chamber of Commerce 
and Industry had only forty members in 1989. 

Labor Force 

"The economy of Bhutan is characterized by the predominance 
of people engaged in self- employment," reported the government's 
Planning Commission in 1989, "particularly those working their 
own land." Statistics available for the mid-1980s revealed that 87 
percent of the working-age population was involved in agricultur- 
al work, another 3.4 percent in government services, 0.9 percent 
in business, 2 percent in "other" occupations, and 6.5 percent — 
mostly teenagers and young adults — that had no stated occupa- 
tion. In the late 1980s, there was a serious shortage of indigenous 
nonagricultural labor and, in the government's view, an overabun- 
dance of foreign laborers. To carry out the construction of roads, 
hydropower plants, and other infrastructure development so im- 
portant to modernization, the government, however, has had to 
depend upon foreign laborers. Low wages for laborers, ties to 
agricultural work, and a dispersed population led to the influx of 
migrant labor, primarily Nepalese, estimated to have reached 
100,000 in 1988. 

The increase in the number of foreign laborers in Bhutan dur- 
ing the 1980s resulted in a government campaign to identify and 
expel the growing number of those without work permits. In a crack- 
down starting in 1986, some 1,000 illegal foreigners were expelled. 
Most were Nepalese; Bangladeshis and Indians made up the 
balance. By 1988 the crackdown had reduced the number of for- 
eign workers and provided opportunities for some 4,000 unem- 
ployed Bhutanese to join the work force. 

Trade union activity was not legalized until 1991. There was 
no collective bargaining, and labor-related issues were nil in a so- 
ciety in which less than 1 percent of the population was involved 
in industrial work. Bhutan was not a member of the International 
Labour Organisation. 

Transportation and Communications 

Roads 

Until 1961, because of the lack of paved roads, travel in Bhu- 
tan was by foot or on muleback or horseback. The 205-kilometer 
trek from the Indian border to Thimphu took six days. Modern 
road construction began in earnest during the First Development 
Plan (1961-66). The first paved road, 175-kilometers-long, was 



306 



Bhutan 



completed in 1962 (a branch road later linked Paro with the 
Phuntsholing-Thimphu road). Described as a jeep track, it linked 
Thimphu and Phuntsholing with Jaigaon, West Bengal. The travel 
time by motor vehicle from the border to Thimphu had shrunk 
to six hours. Some 30,000 Indian and Nepalese laborers were im- 
ported to build the road with Indian aid at a time when India was 
bolstering its strategic defense against a possible Chinese invasion. 
Bhutanese also were obliged to donate labor for the construction 
work. Another road connecting Tashigang with Tawang, Arunachal 
Pradesh, also was built. 

By the mid-1970s, about 1 ,500 kilometers of roads had been built, 
largely by manual labor. There was a linked network of 2,280 kilo- 
meters of roads in 1989; at least 1,761 kilometers of these were 
paved with asphalt, and 1 ,393 kilometers were classified as national 
highways (see fig. 16). Despite the construction of surfaced roads 
linking the principal towns in the south, the mountainous terrain 
elsewhere makes travel even from one valley to the next quite 
difficult. Most roads run in river valleys. As part of the Sixth De- 
velopment Plan, the Department of Public Works, in cooperation 
with the Indian Border Roads Organization, made plans to con- 
struct and upgrade 1 ,000 kilometers of roads and to extend the road 
network through the five major river valleys by 1992. Motorable 
roads were not the only important development. It was estimated 
as part of the Fifth Development Plan that Bhutan also needed some 
2,500 kilometers of mule tracks to connect the nation's 4,500 set- 
tlements. 

A mountainous country with numerous watersheds, Bhutan also 
had numerous bridges. Built as part of the road modernization pro- 
gram, most were of reinforced or prestressed concrete for motor- 
able roads and of modular, prefabricated timber on secondary 
roads. Suspended footbridges joined paths across precipices and 
waterways. 

Nationwide, some 6,910 vehicles were registered in 1988, in- 
cluding 1,235 private automobiles, 250 taxis, 118 buses, 1,105 four- 
wheel-drive vehicles, and 1,249 trucks. The most prevalent form 
of transportation was motorcycles and scooters, with some 2,882 
registered in 1988. Diplomatic offices registered the balance of trans- 
portation vehicles. Most vehicles were of Indian, Japanese, and 
European manufacture. The Bhutan Government Transport Ser- 
vice operated a fleet of buses nationwide and provided minibus 
service twice a day between Thimphu and Phuntsholing. A subsidi- 
ary of the Royal Insurance Corporation, the Transport Corporation 
of Bhutan also ran bus service between Phuntsholing and Calcut- 
ta. In FY 1989, the government bus service carried 1.2 million 



307 



Nepal and Bhutan: Country Studies 

passengers. Starting in 1985, private companies operated some bus 
routes. The greater availability of transportation increased oppor- 
tunities for Bhutanese citizens to travel within their country and 
abroad. There was no railroad system, but a small monorail trail 
was inaugurated in Paro in 1990. It was used to haul produce to 
market. 

Civil Aviation 

The national air carrier of Bhutan was established in 1981 as 
Royal Bhutan Airlines, known as Druk-Air. Thrice- weekly, ninety- 
minute service between Paro and Calcutta was inaugurated in 1983 
using a Dornier 228-200 twenty-seat airplane purchased from West 
Germany. A second Dornier was later added, increasing round- 
trips between Paro and Calcutta to five weekly during the busy 
spring and fall tourist seasons. By 1991 Druk-Air operated inter- 
national flights to Bangkok, Calcutta, New Delhi, Dhaka, and Kath- 
mandu. In November 1988, Druk-Air began using a four-engine, 
eighty-seat British Aerospace BAe 146-100 airplane for its five 
flights weekly: two from Bangkok and Dhaka, two from New Del- 
hi and Kathmandu, and one from Calcutta. The cabin crew was 
trained by Thai Airways. By 1989 the two Dornier aircraft had 
been taken out of service. As Druk-Air flights increased, so did 
the number of passengers. In 1983 some 2,800 passengers were 
carried, and by 1987, the latest year for which statistics were report- 
ed by the government, 8,700 passengers were carried. 

Travelers arriving at the one-story international terminal in 
Paro — the only airport with a permanent-surface runway — were 
transported by minibus to Thimphu. The Paro airport had its run- 
way extended from 1,500 meters to 2,000 meters in 1988 and was 
further improved with a new hangar and an extended runway in 
1990. There was a small, paved-runway airport at Yonphula, 
Tashigang District but it was seldom used. Thimphu was served 
by air only by helicopter, but helipads were available throughout 
the country. 

Aviation in Bhutan in the 1980s and early 1990s was regulated 
by the Department of Civil Aviation and Transport. Under the 
Ministry of Communications, the department provided weather 
data and air traffic controllers. Druk-Air, although government 
owned, was a separate entity from the regulatory department. 

Posts and Telecommunications 

Mail and telecommunications services in 1991 were under the 
jurisdiction of the Ministry of Communications 's Department of 
Posts and the Department of Telecommunications, respectively. 



308 



Bhutan 



With a labor force of nearly 900 employees, the departments worked 
hard to modernize Bhutan's telecommunications and to provide 
links with other nations. 

Although a courier system for internal official mail had been in 
existence for centuries, the modern postal system was introduced 
only in 1962. Prior to then, external mail was sent through Tibet 
or India. Bhutan's first postage stamps were issued in 1955 for in- 
ternal use only. After the construction of modern roads, post offices 
were built throughout the kingdom. Bhutan joined the Universal 
Postal Union, a specialized agency of the UN, in 1969. Thereafter, 
improvements were made in handling international mail and for- 
eign parcels. By 1988 there were two general post offices, fifty-five 
main post offices, and twenty-eight branch post offices. 

The sale of commemorative postage stamps has been a foreign- 
exchange earner for Bhutan since 1962, when the first internal - 
and external-use stamps were issued, with the help of a London 
printer, in rupee demoninations. Until tourism passed the sale of 
colorful stamps to foreign collectors as the major foreign-exchange 
earner in 1974, the sale of postal stamps was the nation's principal 
source of foreign revenue. Sales averaged around US$44,000 a year 
in the 1970s, peaking at US$100,000 in 1979. In a related activi- 
ty, Bhutan also issued commemorative gold and silver coins as a 
revenue generator. 

As of 1991, Bhutan had more than 750 kilometers of telephone 
trunk lines, one digital telephone exchange in Thimphu, and twelve 
analog exchanges in other areas. The Department of Telecommu- 
nications planned to modernize all telephone exchanges and to con- 
nect all eighteen districts to the digital system by 1997. The 
telephone exchange in Thimphu by 1990 had a 10,000-line capa- 
bility. As the 1990s began, there were nearly 2,000 telephones or 
one telephone for about every 700 people according to official in- 
formation. Internationally, Thimphu was linked by a microwave 
system through Hashimara to satellite ground stations in Calcutta 
and New Delhi. The link, financed by India in 1984, provided sixty 
channels and had a potential for 300 channels when fully opera- 
tional. Additionally, using a twenty- terminal French Sagem telex 
system, service between Thimphu and Phuntsholing was installed 
in 1986, and international service through New Delhi was connected 
in 1987; this facility was relocated to Calcutta in 1990. In 1989 
the installation of a Japanese-equipped ground satellite station at 
Thimphu using International Telecommunications Satellite Organi- 
zation (Intelsat) circuits substantially enhanced international 
telephone service. 



311 



Nepal and Bhutan: Country Studies 

There were thirty-nine point-to-point high-frequency radio sta- 
tions, including two installed in Bhutan's embassies in New Delhi 
and Dhaka in 1988 for internal administrative communications. 
There also were eight telegraph offices. The government-run Bhu- 
tan Broadcasting Service in Thimphu started with three hours of 
broadcasts per week in 1973 and had expanded to thirty hours per 
week by 1988. An FM station in Thimphu and shortwave receivers 
throughout the rest of the country received its daily programming 
in Dzongkha, English, Sharchopkha, and Nepali. Whereas there 
were only 7,000 radio receivers in Bhutan in 1980, by 1988 be- 
tween 15,000 and 22,000 sets were reported. In 1991 anew broad- 
casting complex was opened in Thimphu under the auspices of the 
Department of Telecommunications. Built with Indian aid, the 
complex included a high-power fifty-kilowatt shortwave transmit- 
ter capable of covering all of Bhutan and neighboring areas. There 
was no domestic television, but there was a big demand for videos, 
especially in the larger towns. 

Tourism 

Tourism has been an important industry and the country's lar- 
gest foreign-exchange earner since its inception in 1974. Most 
tourists visit cultural sites — particularly dzong and temples — and 
observe seasonal festivals featuring masked dances and archery con- 
tests (archery is the national sport of Bhutan) or go on trekking 
expeditions on foot or mounted on horses or yaks. Limited to land 
travelers from India until Druk- Air's international service became 
operational in 1983, tourism was closely controlled by the state- 
run tourism agency, the Bhutan Tourism Corporation. Tourism 
reaped increasing foreign exchange in its first decade, ranging from 
US$300,000 from 390 visitors in 1976 to US$1.4 million from 1,325 
visitors in 1982. By 1984 some 2,000 tourists visited Bhutan an- 
nually. By 1987 revenues had risen to more than US$2 million 
earned from the 2,524 tourists who visited the country that year. 
The government then decided to limit the number of tourists to 
around 2,000 a year and restricted access seasonally and to cer- 
tain historical, cultural, and scenic sites. These restrictions result- 
ed in decreases to 2,199 tourists and to revenues of US$1.9 million 
in 1988. In 1991, however, the Ministry of Trade, Industry, and 
Tourism announced plans to gradually double the number of en- 
try visas granted and to reduce the charges levied on tour opera- 
tors. The changes provided for the privatization of the Bhutan 
Tourism Corporation. In addition, whereas only group tours were 
allowed before 1991, after that date individual tourists were granted 
visas for prearranged tours. Visited from 1987 to 1990 by only a 



312 




Paro, the air gateway to Bhutan and a major district seat 

Courtesy Ann Kinney 

few travelers, many of Bhutan's religious sites were becoming more 
accessible to tourists in 1991. However, a substantial per person 
tariff, ranging from US$80 to US$200 per day depending on the 
time of year and type of package visit, was kept and helped boost 
revenues. 

Opened to increasing tourism, Bhutan planned to turn over its 
government-run hotels to private management to improve its lodg- 
ing accommodations. The largest number of tourists from a single 
nation, nearly 600 in 1988, came from the United States, and 
tourists from West Germany and Japan were close behind in 
numbers. 

Government and Politics 
The Monarchy 

The hereditary monarchy of Bhutan was established in 1907 af- 
ter 300 years of dual theocratic-civil government (see Establish- 
ment of the Hereditary Monarchy, 1907, this ch.). The Druk 
Gyalpo — the king — is both head of state and head of government. 
In the process of coming to power, the first Druk Gyalpo, Ugyen 
Wangchuck, who reigned from 1907 to 1926, unified the nation, 
established friendly relations with Britain, and set his dynasty's 



313 



Nepal and Bhutan: Country Studies 

political agenda. As of 1991, there had been three other hereditary 
monarchs: Jigme Wangchuck (1926-52), Jigme Dorji Wangchuck 
(1952-72), and Jigme Singye Wangchuck (since 1972). Decem- 
ber 17, the anniversary of the day Ugyen Wangchuck became the 
first hereditary monarch in 1907, is Bhutan's National Day. 

Established as an absolute monarchy in 1907, Bhutan first moved 
toward a constitutional monarchy in 1953 with the foundation of 
its National Assembly. In 1963 the monarch's title was changed 
from "His Highness" to "His Majesty the Druk Gyalpo" in a 
move to assert a distinct Bhutanese identity. The Druk Gyalpo re- 
tained veto power over actions of the National Assembly until 1 969 
when the National Assembly, following his 1968 decree, became 
the kingdom's sovereign institution. After 1969, the National As- 
sembly could remove the Druk Gyalpo through a no-confidence 
vote, and he no longer had veto power. To secure the Wangchuck 
Dynasty, however, should the Druk Gyalpo be dethroned through 
a no-confidence vote, the Wangchuck family member next in line 
of succession would automatically take the throne. Also beginning 
in 1969, at the insistence of the Druk Gyalpo a "democratic monar- 
chy" was to be determined through triennial votes of confidence 
in the Druk Gyalpo 's rule — a system later abolished. 

In 1972 Jigme Singye Wangchuck succeeded his father, Jigme 
Dorji Wangchuck, who had involved the young prince in the work 
of government and had appointed him crown prince and ponlop 
of Tongsa only a few months before dying. After his accession to 
the throne in 1972, the new Druk Gyalpo was assisted by his un- 
cle, Dasho (Prince) Namgyal Wangchuck, and his elder sisters, 
Ashi Sonam Chhoden Wangchuck and Ashi Dechen Wangmo 
Wangchuck, who served in the ministries of finance and develop- 
ment as the Druk Gyalpo 's representatives. (Ashi Sonam Chhoden 
Wangchuck later became minister of finance.) Jigme Singye Wang- 
chuck was formally enthroned in June 1974. 

In 1979 Jigme Singye Wangchuck privately married four sis- 
ters who were descendants of two of the shabdrung, the rulers of the 
old dual system of government. In 1988, in order to legitimize the 
eventual succession to the throne for his oldest son, Dasho Jigme 
Gesar Namgyal Wangchuck, the Druk Gyalpo and his four sister- 
queens were married again in a public ceremony in Punakha. At 
the time of the public wedding, it was reported that the Druk Gyalpo 
lived in a small, simply furnished house, across from the Tashi- 
chhodzong (Fortress of the Glorious Religion), the year-round 
central government complex in Thimphu. His four queens each 
maintained separate residences. The Druk Gyalpo 's mother, the 
Dowager Queen Pemadechen (Ashi Kesang Dorji), continued to 



314 



Bhutan 



reside in the royal palace at Dechenchholing, living as a Buddhist 
nun. The Tashichhodzong, a stone-and-timber structure, has thick 
whitewashed walls, seven towers covered with red roofs, and a series 
of interior courtyards. The entire structure is richly ornamented. 
The current Tashichhodzong complex, which has more than 100 
rooms, was completed in 1969 after seven years of construction 
on the site of an older dzong of the same name. Originally built 
in the twelfth century, the Tashichhodzong had been rebuilt in the 
eighteenth century and required the 1962-69 reconstruction be- 
cause of damage over the centuries from fires and earthquakes. 
It also was the residence of the spiritual leader of Bhutan, the Je 
Khenpo, during the summer. 

After coming to the throne in 1972, Jigme Singye Wangchuck 
became increasingly interested in economic development and 
traveled extensively throughout the country. He also has traveled 
a great deal outside of Bhutan, attending international meetings 
and personally representing his country in New Delhi on frequent 
occasions. A young, vigorous head of state unafraid to break from 
the bureaucracy and constraints of his office — including his trips 
to the countryside where the Druk Gyalpo could be seen "serving 
the people" — Jigme Singye Wangchuck presented the monarchy 
as progressive and symbolic of national unity. 

Structure of the Government 

Legal Basis 

Bhutan does not have a written constitution or organic laws. The 
1907 document submitted by the monastic and government lead- 
ers was an agreement only to establish an absolute hereditary 
monarchy. Bhutan's only legal or constitutional basis is the 1953 
royal decree for the Constitution of the National Assembly. The 
1953 constitution set forth eighteen succinct "rules" for the proce- 
dures of the National Assembly and the conduct of its members. 
The May 1968 revision reiterated and elucidated some of the eigh- 
teen rules but revised others. Beginning in 1969, the powers of the 
speaker of the National Assembly were strengthened, and the Druk 
Gyalpo 's veto power was eliminated. 

Legislature 

The unicameral National Assembly— the Tshogdu — comprises 
the legislative branch of government. The National Assembly has 
the power to enact civil, criminal, and property laws; to appoint 
and remove ministers; to debate policy issues as a means of pro- 
viding input to government decision making; and to control the 



315 






316 



Tashichhodzong complex, Bhutan 's seat of government in Thimphu 

Courtesy Elsa Martz 



317 



Nepal and Bhutan: Country Studies 

auditor general, who has approval authority over government ex- 
penditures (see fig. 17). 

Since its establishment in 1953, the National Assembly has varied 
in size from 140 to 200 members. According to Rule 7 of the Con- 
stitution of the National Assembly, the legislature sets its size ev- 
ery five years. The National Assembly has three categories of 
members: representatives of the people elected by indirect vote every 
three years and comprising between half and two-thirds of the Na- 
tional Assembly membership; monastic representatives, also ap- 
pointed for three-year terms and constituting about one-third of 
the membership; and government officials nominated by the Druk 
Gyalpo. The first woman member of the National Assembly was 
seated in 1979. 

In 1989 there were 150 members in the National Assembly, 100 
of whom were representatives of the general public. Under 1981 
rules, qualified citizens over twenty-five years of age can be nomi- 
nated at general public meetings by village heads and adult 
representatives of each household (gung) and "joint family." Once 
nominations are certified by village heads and local government 
officials, they are forwarded to the speaker of the National Assem- 
bly for "final declaration of the nominee as a member of the Na- 
tional Assembly. ' ' The other fifty members are made up of monastic 
representatives nominated by the Central Monastic Body in Thim- 
phu (or Punakha in the winter) and eight district monastic bodies, 
members of the Council of Ministers (Lhengye Shungtsong), mem- 
bers of the Royal Advisory Council (Lodoi Tsokde), secretaries 
of various government departments, district heads, others nomi- 
nated by the government, and a representative nominated by the 
Bhutan Chamber of Commerce and Industry. The National As- 
sembly meets at least once and sometimes twice a year — in May 
and June and again in October and November; each session lasts 
about four weeks. Emergency sessions can also be called by the 
Druk Gyalpo. 

The National Assembly elects a speaker from among its mem- 
bers and is authorized to enact laws, advise the government on 
constitutional and political matters, and hold debates on impor- 
tant issues. Executive-branch organizations are responsible to the 
National Assembly. Powers of the National Assembly include direct- 
ly questioning government officials and forcing ministers to resign 
if there is a two- thirds no-confidence vote. 

National Assembly votes are secret in principle, but in practice 
decisions are almost always made by reaching a public consensus. 
The National Assembly, housed in the Tashichhodzong, provides 
a forum for presenting grievances and redressing administrative 



318 



Bhutan 



problems. The Druk Gyalpo cannot formally veto bills that the Na- 
tional Assembly passes, but he can refer them back for reconsider- 
ation. Although criticism of the Druk Gyalpo was not permitted 
in the public media, it was allowed and took place in National As- 
sembly debates in the 1980s. 

Executive 

At the apex of the executive branch is the Druk Gyalpo, who 
is both head of state and head of the government. Responsible to 
him are two advisory and executive organizations: the Royal Ad- 
visory Council and the Council of Ministers. There also is the Royal 
Secretariat, which serves as an intermediary between the Druk 
Gyalpo and the Council of Ministers. 

The Royal Advisory Council was mentioned in the 1953 Con- 
stitution of the National Assembly (members of the council are con- 
currendy members of the National Assembly), but it took on greater 
importance in 1965 when the Druk Gyalpo installed representa- 
tives elected by the monastic bodies and the National Assembly. 
In 1989 the council's membership included a representative of the 
government, two representatives of the monasteries, six regional 
representatives, and a chairperson, all serving for five-year terms. 
The chairperson and the government representative are appoint- 
ed by the Druk Gyalpo; the two monks represent the central and 
district monastic bodies. Monk representatives, according to 1979 
regulations for council membership, are required to be literate and 
"highly knowledgeable about the Drukpa Kargyupa religion." 
Monk nominees are subject to the approval of the speaker of the 
National Assembly. The regional representatives are elected by the 
National Assembly from a list endorsed by village assemblies. 
Representing the southeastern, southwestern, western, eastern, cen- 
tral, and the Thimphu-Paro-Ha regions, they are required to be 
literate, knowledgeable about Bhutanese traditional culture and cus- 
toms with "some knowledge of modern customs and etiquette," 
"well-behaved and able to speak well," "able to shoulder respon- 
sibility, and far-sighted." As the principal consulting body to the 
Druk Gyalpo, the Royal Advisory Council is a key state organiza- 
tion and interacts most directly with the National Assembly. 

Chaired by the Druk Gyalpo, the Council of Ministers was es- 
tablished in 1968 with the approval of the National Assembly. In 
1991 it comprised seven ministers and the Druk Gyalpo 's represen- 
tative in each ministry (agriculture; communications; finance; for- 
eign affairs; home affairs; social services; and trade, industry, and 
tourism). The largest ministry by far was the Ministry of Social 
Services, which ran the nation's education and health systems and 



319 



Nepal and Bhutan: Country Studies 



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included nearly 26 percent of all civil service employees. Two of 
the ministers in 1990 — the minister of finance (Ashi Sonam 
Chhoden Wangchuck) and the minister of home affairs (Dasho 
Namgyal Wangchuck) — were members of the royal family. 

Until the 1960s, the Royal Secretariat played a major role in 
government affairs. The key officials of the Royal Secretariat were 
the Druk Gyalpo's representative in the Royal Bhutan Army, the 
royal chief secretary, and the royal finance secretary. After the es- 
tablishment of the Council of Ministers and subsequent shift of ad- 
ministrative and financial matters out of the palace, however, the 
Royal Secretariat's day-to-day role diminished in importance. Re- 
lations between the two bodies have been described as cordial, 
nevertheless, and ministers usually were selected from among Royal 
Secretariat personnel. 

Judiciary 

The highest-level court is the Supreme Court of Appeal — the 
Druk Gyalpo himself. The Supreme Court of Appeal hears appeals 
of decisions emanating from the High Court (Thrimkhang Gong- 
ma). In 1989 the High Court, which was established in 1968 to 
review lower-court appeals, had six justices (including a chief 
justice), two of whom were elected by the National Assembly and 
four of whom were appointed by the Druk Gyalpo, for five-year 
terms. Each district has a magistrate's court (Dzongkhag Thrim- 
khang), headed by a magistrate or thrimpon, from which appeals 
can be made to the High Court. Minor civil disputes are adjudi- 
cated by a village head. All citizens have been granted the right 
to make informal petitions to the Druk Gyalpo, some of which have 
been made reportedly by citizens who flagged down the Druk Gyal- 
po 's automobile as he toured the nation. 

Civil Service 

Bhutan's government employees have been under the authori- 
ty of the Royal Civil Service Commission since its establishment 
in 1982. Part of the commission's mandate was to reform govern- 
ment service. With assistance from the UNDP, the commission 
held a conference in 1986 and assessed the civil service. Plans were 
laid out for providing in-country and foreign training, improving 
training effectiveness, and organizing a system by which person- 
nel and training management would be linked within departments. 
Civil service rules adopted in 1989 established procedures for 
government employment and prohibited civil servants from being 
assigned to their home districts. Starting in 1989, candidates for 
government service were given only one opportunity to pass the 



321 



Nepal and Bhutan: Country Studies 

civil service selection examination. Once they were selected, pro- 
motions were available through seventeen grades, from the lowest 
clerk to just below the deputy minister level. 

In an efficiency drive in the late 1980s, the civil service was 
reduced through reorganization (the government was scaled down 
from thirty- three entities at and above the department level in 1985 
to nineteen in 1989), reassignment to local government, retirements, 
and "voluntary resignations." In 1987 there were 13,182 civil ser- 
vice workers, but by 1989 the number of regular civil service em- 
ployees had dropped to 11,099. An additional 3,855 persons worked 
under government contract or as "wage" employees throughout 
all parts of the government. More than 1,650 of them, however, 
were employed by government-run industries, and another 848 
worked for the Chhukha Hydel Project. The total number of per- 
sons working under the civil service in July 1989 was 15,802. Later 
in 1989, however, all public and joint sector corporation employees 
were removed from the civil service rolls. Because of the national 
shortage of skilled workers, 3,137 members of the civil service in 
1989 were reportedly "nonnationals," mostly ethnic Nepalese. 

Local Government 

Local government in 1991 was organized into four zones, or 
dzongdey, and eighteen districts, or dzongkhag (see fig. 13). Before 
the zonal administration system was established beginning in 1988 
and 1989, the central government interacted directly with district 
governments. The new level of administration was established, ac- 
cording to official sources, to "bring administration closer to the 
people" and to "expedite projects without having to refer con- 
stantly to the ministry." In other words, the zonal setup was to 
provide a more efficient distribution of personnel and adminis- 
trative and technical skills. The zonal boundaries were said to be 
dictated by geophysical and agroclimatic considerations. Zonal ad- 
ministrators responsible for coordinating central policies and plans 
acted as liaisons between the central ministries and departments 
and district governments. Each zonal headquarters had nine divi- 
sions: administration, accounts, agriculture, animal husbandry, edu- 
cation, engineering, health, irrigation, and planning. The divisions 
were staffed with former civil service employees of the Ministry of 
Home Affairs and with technical personnel from the various sec- 
tors in the districts. Four zones were established in 1988 and 1989: 
Zone I, including four western districts, seated at Chhukha; Zone II, 
including four west-central districts, seated at Damphu; Zone III, in- 
cluding four east-central districts, seated at Geylegphug; and Zone 
IV, including five eastern districts, seated at Yonphula. Although 



322 



Bhutan 



Thimphu District and Thimphu Municipality were within the 
boundaries of Zone I, they remained outside the zonal system. By 
1991, however, only Zone IV was fully functioning. 

Eighteen districts comprised local government at the next eche- 
lon. Each district was headed by an appointed district officer (dzong- 
da, assisted by a deputy district officer, dzongda wongmo or dzongrab), 
who was responsible for development planning and civil adminis- 
tration. Formerly appointed by the Druk Gyalpo, district officers 
have been appointed by the Royal Civil Service Commission since 
1982. Each district also had a district development committee com- 
prising elected representatives and government officials. 

Districts were further subdivided into subdistricts (dungkhag) and 
village blocks or groups (gewog). Ten of the eighteen districts had 
subdistricts, which were further subdivided into village groups. The 
subdistrict served as an intermediate level of administration be- 
tween district government and some villages in larger districts. 
These same districts also had village groups that were immediate- 
ly subordinate to the district government. In the remaining eight 
smaller districts, village groups were directly subordinate to the 
district government. In 1989 there were 191 village groups, 67 of 
which were organized into 18 subdistricts and 124 of which were 
immediately subordinate to the district government. Subdistrict 
officers (dungpa) led the subdistricts, and village heads (gup in the 
north, mandal in the south) were in charge of the village groups. 
Despite greater central government involvement with economic de- 
velopment programs since the 1960s, villages continued to have 
broad local autonomy. There were 4,500 villages and settlements 
in 1991. 

Bhutan also has two municipal corporations — Thimphu and 
Phuntsholing — headed by mayors (thrompon). Thimphu's municipal 
corporation was set up in 1974 as an experiment in local self- 
government. Headed by a chairperson, the corporation concen- 
trated on sanitation and beautification projects. A superintending 
engineer, an administrative officer, a plant protection officer, and 
a tax collector served under a chief executive officer. Ward coun- 
cillors carried out local representation in the city's seven wards. 
In subsequent years, municipal boards were set up in the larger 
towns. 

Political Developments 

The political forces that shaped Bhutan after its seventeenth- 
century unification were primarily internal until the arrival of the 
British in the eighteenth century. Thereafter, British pressure and 
protection influenced Bhutan and continued to do so until Britain's 



323 



Nepal and Bhutan: Country Studies 

withdrawal from the mainland of South Asia in 1947. The nation- 
alist movements that had brought independence to India had sig- 
nificant effects on Sikkim and Nepal. Because of its relative isolation, 
however, they left Bhutan largely unaffected until the growing 
Nepalese minority became increasingly exposed to the radical pol- 
itics of Nepalese migrants from India. These migrants brought po- 
litical ideas inspired by Indian democratic principles and agitation 
to the minority community in southern Bhutan. By 1950 the 
presence of that community had resulted in government restric- 
tions on the cultivation of forest lands and on further migration. 

Expatriate Nepalese, who resettled in West Bengal and Assam 
after leaving Bhutan, formed the Bhutan State Congress in 1952 
to represent the interests of other expatriates in India as well as 
the communities they had left behind. An effort to expand their 
operations into Bhutan with a satyagraha (nonviolent resistance) 
movement in 1954 failed in the face of the mobilization of Bhu- 
tan's militia and a lack of enthusiasm among those Nepalese in 
Bhutan who did not want to risk their already tenuous status. The 
government further diffused the Bhutan State Congress movement 
by granting concessions to the minority and allowing Nepalese 
representation in the National Assembly. The Bhutan State Con- 
gress continued to operate in exile until its decline and gradual dis- 
appearance in the early 1960s. The leaders in exile were pardoned 
in 1969 and permitted to return. 

Despite the absence of political parties, political activities car- 
ried out by elite political factions have played a role since the 1960s. 
These factional politics have generally been devoid of ideology, 
focusing instead on specific issues or events. Only with the 1964 
assassination of Lonchenjigme Palden Dorji did factional politics 
cause a national crisis (see Modernization under Jigme Dorji, 
1952-72, this ch.). 

Government decrees promulgated in the 1980s sought to preserve 
Bhutan's cultural identity in a "one nation, one people" policy 
called driglam namzha (national customs and etiquette). The govern- 
ment hoped to achieve integration through requiring national 
dress — the kira for women and the gho for men — at formal gather- 
ings (by a May 1989 decree that was quickly reversed) and insist- 
ing that individual conduct be based on Buddhist precepts. The 
government stressed standardization and popularization of Dzong- 
kha, the primary national language, and even sponsored such 
programs as the preservation of folksongs used in new year and 
marriage celebrations, house blessings, and archery contests. 

Other cultural preservation efforts, especially those aimed at 
traditional Bhutanese arts and crafts that had long been under royal 



324 



Bhutan 



family patronage, were embodied in the Sixth Development Plan. 
Bhutan participated in the Olympic Games and in other interna- 
tional games, and imported high-tech bows for use in national 
archery tournaments, although for a time only the simple tradi- 
tional bow was permitted in contests within Bhutan. In 1989 Nepali 
ceased to be a language of instruction in schools, and Dzongkha 
was mandated to be taught in all schools. In 1989 the government 
also moved to implement the Citizenship Act of 1985, which provid- 
ed that only those Nepalese immigrants who could show they had 
resided in Bhutan for fifteen or twenty years (depending on oc- 
cupational status), and met other criteria, might be considered for 
grants of citizenship by naturalization. An earlier law, passed in 
1958, had for the first time granted Bhutanese citizenship to Nepa- 
lese landed settlers who had been in Bhutan for at least ten years. 
To ameliorate some of the differences between the ethnic commu- 
nities, interethnic marriages among citizens, once forbidden, were 
allowed as a means of integrating the Nepalese. 

Bhutan's concern heightened in the late 1980s when Nepalese 
liberation movements emerged in India. In 1988 some ethnic Nepa- 
lese in Bhutan again began protesting the alleged discrimination 
against them. They demanded exemption from the government 
decrees aimed at enhancing Bhutanese national identity by strength- 
ening aspects of traditional culture (under the rubric of driglam nam- 
zha). It was likely that they were inspired by prodemocracy activities 
in their homeland as well as by democratic, Marxist, and Indian 
social ideas picked up during their migration through or educa- 
tion in India (see Political Parties, ch. 4). 

The reaction to the royal decrees in Nepalese majority commu- 
nities surfaced as ethnic strife directed against non-Nepalese-origin 
people. Reactions also took form as protest movements in Nepal 
and India among Nepalese who had fled Bhutan. The Druk Gyal- 
po was accused of "cultural suppression," and his government was 
charged by antigovernment leaders with human rights violations, 
including the torture of prisoners; arbitrary arrest and detention; 
denial of due process; and restrictions of freedoms of speech and 
press, peaceful organization and assembly, and workers' rights. 

Antigovernment protest marches involved more than 20,000 par- 
ticipants, including some from a movement that had succeeded in 
coercing India into accepting local autonomy for ethnic Nepalese 
in West Bengal, who crossed the border from West Bengal and 
Assam into six Bhutan districts. In February 1990, antigovernment 
activists detonated a remote-control bomb on a bridge hear Phunt- 
sholing and set fire to a seven-vehicle convoy. In September 1990, 
clashes occurred with the Royal Bhutan Army, which was ordered 



325 



Nepal and Bhutan: Country Studies 

not to fire on protesters. The men and women marchers were or- 
ganized by S.K. Neupane and other members of the illegal Bhu- 
tan People's Party, which reportedly urged the marchers to demand 
democracy and human rights for all Bhutanese citizens. Some vil- 
lagers willingly joined the protests; others did so under duress. The 
government branded the party, reportedly established by anti- 
monarchists and backed by the Nepali Congress Party and the 
Marxist-Leninist faction of the Communist Party of Nepal, as a 
terrorist organization. The party allegedly led its members — said 
to be armed with rifles, muzzle-loading guns, knives, and home- 
made grenades — in raids on villages in southern Bhutan, disrob- 
ing people wearing traditional Bhutanese garb; extorting money; 
and robbing, kidnapping, and killing people. Reportedly, there were 
hundreds of casualties, although the government admitted to only 
two deaths among security forces. Other sources indicated that more 
than 300 persons were killed, 500 wounded, and 2,000 arrested 
in clashes with security forces. Along with the above-mentioned 
violence, vehicle hijackings, kidnappings, extortions, ambushes, 
and bombings took place, schools were closed (some were de- 
stroyed), and post offices, police, health, forest, customs, and 
agricultural posts were destroyed. For their part, security forces 
were charged by the Bhutan People's Party, in protests made to 
Amnesty International and the International Human Rights Com- 
mission, with murder and rape and carrying out a "reign of ter- 
ror." In support of the expatriate Nepalese, the general secretary 
of the Nepali Congress Party, the ruling party in Nepal, called on 
the Druk Gyalpo to establish a multiparty democracy. 

The Bhutanese government admitted only to the arrest of forty- 
two people involved in "anti-national" activities in late 1989, plus 
three additional individuals who had been extradited from Nepal. 
All but six were reportedly later released; those remaining in jail 
were charged with treason. By September 1990, more than 300 
additional prisoners held in the south were released following the 
Druk Gyalpo 's tour of southern districts. 

In the face of government resistance to demands that would in- 
stitutionalize separate identities within the nation, protesters in the 
south insisted that the Bhutan People's Party flag be flown in front 
of administrative headquarters and that party members be allowed 
to carry the kukri, a traditional Nepalese curved knife, at all times. 
They also called for the right not to wear the Bhutanese national 
dress and insisted that schools and government offices stay closed 
until their demands were met. The unmet demands were accom- 
panied by additional violence and deaths in October 1990. At the 
same time, India pledged "all possible assistance that the royal 



326 



Bhutan 



government might seek in dealing with this problem" and assured 
that it would protect the frontier against groups seeking illegal en- 
try to Bhutan. 

By early 1991, the press in Nepal was referring to insurgents 
in southern Bhutan as " freedom fighters." The Bhutan People's 
Party claimed that more than 4,000 advocates of democracy had 
been arrested by the Royal Bhutan Army. Charges were made that 
some of those arrested had been murdered outside Bhutanese police 
stations and that some 4,200 persons had been deported. 

Supporting the antigovernment activities were expatriate Nepa- 
lese political groups and supporters in Nepal and India. Between 
2,000 and 12,000 Nepalese were reported to have fled Bhutan in 
the late 1980s, and according to a 1991 report, even high-level 
Bhutanese government officials of Nepalese origin had resigned 
their positions and moved to Nepal. Some 5 million Nepalese were 
living in settlements in India along the Bhutan border in 1990. 
Nepalese were not necessarily welcome in India, where ethnic strife 
conspired to push them back through the largely unguarded 
Bhutanese frontier. The Bhutan People's Party operated among 
the large Nepalese community in northern India. A second group, 
the Bhutan People's Forum for Human Rights (a counterpart of 
the Nepal People's Forum for Human Rights), was established in 
Nepal by a former member of Bhutan's National Assembly, 
Teknath Rizal. In November 1989, Rizal was allegedly abducted 
in eastern Nepal by Bhutanese police and returned to Thimphu, 
where he was imprisoned on charges of conspiracy and treason. 
The Bhutan Students Union and the Bhutan Aid Group- Nepal also 
were involved in political activism. 

The government explained its cultural identity programs as a 
defense against the first political problems since the Wangchuck 
Dynasty was established in 1907 and the greatest threat to the na- 
tion's survival since the seventeenth century. Its major concern was 
to avoid a repeat of events that had occurred in 1975 when the 
monarchy in Sikkim was ousted by a Nepalese majority in a plebi- 
scite and Sikkim was absorbed into India. In an effort to resolve 
the interethnic strife, the Druk Gyalpo made frequent visits to the 
troubled southern districts, and he ordered the release of hundreds 
of arrested "antinationals." He also expressed the fear that the 
large influx of Nepalese might lead to their demand for a separate 
state in the next ten to twenty years, in much the same way as hap- 
pened in the once-independent monarchy of Sikkim in the 1970s. 
To deter and regulate Nepalese migration into Bhutan from India, 
the Druk Gyalpo ordered more regular censuses, improved border 
checks, and better government administration in the southern 



327 



Nepal and Bhutan: Country Studies 

districts. The more immediate action of forming citizens' militias 
took place in October 1990 as a backlash to the demonstrations. 
Internal travel regulations were made more strict with the issue 
of new multipurpose identification cards by the Ministry of Home 
Affairs in January 1990. 

By the end of 1990, the government admitted the serious effects 
of the antigovernment violence. It was announced that foreign- 
exchange earnings had dropped and that the GDP had decreased 
significantly because of terrorist activities. 

Ethnic problems were not Bhutan's only political concern in the 
early 1990s. Rumors persisted that the exiled family of Yangki, 
the late Druk Gyalpo's mistress, including an illegitimate pretender 
to the throne, were garnering support among conservative forces 
in Bhutan to return to a position of authority. 

The Media 

In 1986 a weekly government news bulletin, Kuensel, was refor- 
matted under the same title and also published weekly as Bhutan's 
only newspaper. Published by the Ministry of Communications' 
Department of Information, Kuensel had a total circulation in 1988 
of 12,500 and was published in Dzongkha, Nepali, and English. 
Indian and other foreign newspapers also were available. Bhutan's 
low literacy rate, however, means that the majority of the popula- 
tion is not affected by the print media. Oral tradition is very strong, 
however, and radio broadcasts are widely listened to. 

Bhutan Broadcasting Service, established in 1973 and given its 
current name in 1986, operated under the auspices of the Depart- 
ment of Information; it offered thirty hours a week of shortwave 
radio programming in Dzongkha, Sharchopkha, Nepali, and En- 
glish. There was daily FM programming in Thimphu and short- 
wave reception throughout the rest of the nation in the early 1990s. 
In 1991 there were thirty-nine public radio stations for internal com- 
munications. There were also two stations used exclusively for com- 
munications with Bhutan's embassies in New Delhi and Dhaka and 
thirteen stations used by hydrologists and meteorologists. There 
were no television stations in Bhutan in the early 1990s, and a 1989 
royal decree ended the viewing of foreign television by mandating 
the dismantling of antennas. The government wanted to prevent 
Indian and Bangladeshi broadcasts from reaching Bhutan's citizens. 

Foreign Relations 

Historically, Bhutan's foreign policies were greatly influenced 
by Tibet. Bhutan acknowledged Tibet's influence over it until 1860 
and continued to pay a nominal tribute to Tibet until the mid- 1940s, 



328 



Bhutan 



although not necessarily on a friendly basis. Despite religious and 
cultural affinities, most of Bhutan's elite were refugees who had 
fled Tibet for religious reasons over the centuries. From 1865 to 
1947, Britain guided Bhutan's foreign affairs. Thereafter Bhutan's 
foreign relations until the early 1970s were under the guidance of 
India, with which Bhutan had had official diplomatic relations from 
1949. During the 1970s and 1980s, however, Bhutan became a 
member of the UN and its affiliated agencies; established formal 
diplomatic relations with fifteen other nations, primarily in South 
Asia and Scandinavia; actively participated in the South Asian As- 
sociation for Regional Cooperation (SAARC — see Glossary) and 
the Nonaligned Movement; spoke out against, among other sub- 
jects, nuclear proliferation and terrorism; and had a peripatetic 
head of state who traveled abroad widely (see table 31 , Appendix). 
By the early 1990s, Bhutan's foreign policies were effectively au- 
tonomous. 

A shortage of diplomatic officials limited Thimphu's missions 
in New York and Geneva (established in 1985) and meant that the 
nation could only staff embassies in New Delhi, Dhaka, and 
Kuwait. Bhutan had only one employee, a computer programmer, 
at the SAARC headquarters in Kathmandu in late 1990. Only India 
and Bangladesh had representatives in Thimphu in 1991; other 
nations generally gave dual accreditation to their ambassadors in 
New Delhi to enable them to represent their countries' interests 
in Thimphu. Similarly, because of the shortage of diplomatic per- 
sonnel, the head of the Bhutanese UN mission in Geneva, for ex- 
ample, also served as ambassador to Austria, Denmark, Finland, 
the Netherlands, Norway, Sweden, the European Economic Com- 
munity (EEC), and several UN affiliates. The ambassador to 
Kuwait is accredited to Switzerland because of Swiss rules that dis- 
allow the UN representative in Geneva to also be accredited to Swit- 
zerland. Honorary consuls represented Bhutan in Singapore, Hong 
Kong, Macao, Osaka, and Seoul, and the Republic of Korea (South 
Korea) had an honorary consul in Thimphu. 

Bhutan had no formal diplomatic relations with the United States 
as of 1991 . It was one of only seven sovereign nations in the world 
with which the United States did not maintain formal representa- 
tion. Informal contact was maintained, however, between the em- 
bassies of Bhutan and the United States in New Delhi, and Bhutan's 
permanent mission at the United Nations in New York had con- 
sular jurisdiction in the United States. It has been speculated that 
Bhutan, in light of India's close relations with the Soviet Union, 
had elected to keep equidistant from both superpowers. Neverthe- 
less, during a visit with a United States senator in 1985, the Druk 



329 



Nepal and Bhutan: Country Studies 

Gyalpo personally expressed strong support for the United States 
as the principal bulwark against the Soviet Union in South Asia. 
The United States ambassador to New Delhi was among numer- 
ous emissaries of nations without diplomatic ties to pay courtesy 
calls in Thimphu in the 1980s. Contacts with the Soviet Union and 
other communist countries were nil. 

India 

Bhutan is bounded on three sides by India. From east to west, 
the Indian states of Sikkim, West Bengal, Assam, and Arunachal 
Pradesh (formerly the North-East Frontier Agency) border Bhu- 
tan. In view of the long-standing political disputes and border con- 
frontations between India and China, Bhutan has long been part 
of India's strategic defense plan (see Strategic Location, this ch.). 
In the view of some Indian strategists, Bhutan was a weak link in 
India's defense against China. 

The key document guiding relations with India is the Treaty of 
Friendship Between the Government of India and the Government 
of Bhutan of 1949. The ten-article treaty, in force in perpetuity, 
calls for peace between the two countries and assures Indian non- 
interference in Bhutan's internal affairs in return for Bhutan's 
agreeing "to be guided by the advice of the Government of India 
in regard to its external relations" (Article 2). The treaty provides 
for compensation by India at a higher rate than provided in the 
1865 and 1910 British treaties, and it returned Bhutan's Dewan- 
giri territory seized by Britain in the Duar War. It also guarantees 
free trade between the countries and duty-free transit across India 
of Bhutan's imports. Furthermore, the treaty assures the rights of 
citizens of each country and the extradition of criminals seeking 
refuge in either country. 

Events in Tibet have had causal effects on Bhutan-Indian re- 
lations. When the Chinese communists took over Tibet in 1951, 
Bhutan braced itself against a renewed external threat with a mod- 
ernization program and a new defense posture. In his first visit 
to Bhutan in 1958, Indian prime minister J awaharlal Nehru reiter- 
ated India's wish that Bhutan remain an independent country, "tak- 
ing the path of progress according to your will." Following 
precedent, Bhutan sided with India when the Chinese army oc- 
cupied Tibet in 1959 and a border dispute emerged between China 
and India. Nehru declared in the Indian parliament in November 
1959 that "any aggression against Bhutan . . . would be regarded 
as an aggression against India." A de facto alliance developed be- 
tween Bhutan and India by 1960, and Indian aid increasingly bol- 
stered Bhutan's strategic infrastructure development. In times of 



330 



Bhutan 



crisis between India and China or between Bhutan and China, India 
was quick to assure Bhutan of military assistance. Concerns were 
raised by Bhutan, however, during the 1971 Indo-Pakistani War 
when there were doubts about India's ability to protect Bhutan 
against China (which sided with Pakistan) while fighting a two- 
front war. 

In 1960 the Druk Gyalpo had said that Bhutan was not 100 per- 
cent independent because of the 1949 treaty, and until Bhutan 
emerged into the world of international diplomacy by joining the 
UN in 1971, Article 2 of the treaty seemed intact. Admission to 
the UN, however, changed Bhutan's perspective on the world be- 
yond India and Thimphu's traditional dependence on New Del- 
hi. Two years later, Bhutan and Bangladesh exchanged diplomatic 
recognition, hinting further at Thimphu's independent attitude. 
A new interpretation of the relationship emerged in 1974 when Bhu- 
tan's minister of foreign affairs said that Bhutan's following In- 
dia's advice and guidance on foreign policy matters was optional. 
Bhutan had raised its representation in India to the ambassadorial 
level in 1971 and in 1978 changed the name of its diplomatic office 
in New Delhi from the Royal Bhutan Mission to the Royal Bhu- 
tan Embassy to further reflect its sovereign status. A new trade 
agreement between Bhutan and India in 1972 exempted from ex- 
port duties goods from Bhutan to third countries. 

The Druk Gyalpo 's statement in 1979 that the 1949 treaty needed 
to be i 'updated" was still another move asserting independence. 
Members of the National Assembly speaking just before the Druk 
Gyalpo 's "update" announcement made the interpretation that 
Article 2 only required Bhutan to seek India's advice and guidance 
on matters of external affairs. Bhutan exerted its independent stance 
at the Nonaligned Movement summit conference in Havana, also 
in 1979, by voting with China and some Southeast Asian coun- 
tries rather than with India on the issue of allowing Cambodia's 
Khmer Rouge to be seated at the conference. Bhutan's votes in 
the UN on such issues as the status of landlocked nations also did 
not follow India's leads. 

Despite a history of good relations between Bhutan and India, 
bilateral border issues long went unresolved. Indo-Bhutanese bor- 
ders had been delineated in the Treaty of Peace of 1865 between 
Bhutan and Britain, but it was not until the period between 1973 
and 1984 that a detailed delineation and demarcation was made. 
Border demarcation talks with India generally resolved disagree- 
ments except for several small sectors, including the middle zone 
between Sarbhang and Geylegphug and the eastern frontier with 
Arunachal Pradesh. 



331 



Nepal and Bhutan: Country Studies 
China 

The other nation that borders Bhutan is China, with which Bhu- 
tan had no diplomatic relations as of mid-1991. Bhutan and Chi- 
na have long had differences with respect to the delineation of their 
common border, which follows natural features — the watershed of 
the Chumbi Valley in the northwest and the crest of the Great 
Himalayan Range of mountains in the north. The part of China 
that borders Bhutan — Tibet, or the Xizang Autonomous Region — 
has important historical, cultural, and religious ties to Bhutan (see 
Origins and Early Settiement, A.D. 600-1600, this ch.). China had 
been heavily involved in Tibetan affairs since the 1720s, and it was 
through this involvement that Bhutan and China had their first 
direct relations. Bhutanese delegations to the Dalai Lama came 
into contact with the Chinese representatives in Lhasa, but there 
never was a tributary relationship with Beijing. Relations with Tibet 
itself, never particularly good, were strained considerably when 
Bhutan sided with Britain in the early 1900s. Trying to secure its 
southwestern flank against increasing foreign aggression, China 
claimed a vague suzerainty over Bhutan in the period just before 
the Chinese Revolution of 1911. The new Republic of China let 
the claim lapse, however, and it never again was raised publicly. 

Tension in Bhutan-China relations increased with the Chinese 
occupation of Tibet in 1951 and again rose with the anti-Chinese 
revolts in eastern and central Tibet between 1954 and 1958. The 
massive Tibetan uprisings in 1959 and the flight to India of the 
Dalai Lama, as well as the heightened presence of Chinese forces 
on the ill-defined frontier, alerted Bhutan to the potential threat 
it faced, and its representative in Tibet was withdrawn. Included 
in the territory occupied by the Chinese People's Liberation Army 
were the eight western Tibetan enclaves administered by Bhutan 
since the seventeenth century. New Delhi intervened with Beijing 
on behalf of Thimphu regarding the enclaves, but the Chinese re- 
fused to discuss what they considered a matter between China and 
Bhutan. Another problem with China emerged at this time as the 
result of the flight to Bhutan of some 6,000 Tibetan refugees. The 
specter of renewed Chinese claims to Bhutan, Sikkim, and Nepal 
was raised after China published a map in 1961 that showed alter- 
ations of traditional Sino-Bhutanese and other Himalayan bor- 
ders in Beijing's favor. Bhutan responded with an embargo on 
cross-border trade and closer links with India. 

During this period, Thimphu continued to withstand Beijing's 
mixture of threats and offers of conciliation in the form of economic 
aid and assurance of independence. Tension was renewed during 



332 



Bhutan 



the 1962 Sino-Indian border war when the Chinese army outflanked 
Indian troops, who, with permission of Bhutanese authorities, 
retreated through southeastern Bhutan. More fearful of China than 
confident of India's ability to defend it, Bhutan formally maintained 
a policy of neutrality while quietly expanding its relations with In- 
dia. Cross-border incursions by Chinese soldiers and Tibetan herd- 
ers occurred in 1966, but tensions generally lessened thereafter and 
during the 1970s. In 1979 a larger than usual annual intrusion by 
Tibetan herders into Bhutan brought protests to Beijing from both 
Thimphu and New Delhi. China, again seeking a direct approach 
with Bhutan, ignored the Indian protest but responded to the one 
from Bhutan. As part of its policy of asserting its independence 
from India, Bhutan was open to direct talks, whereas India con- 
tinued to see the Sino-Bhutan boundary issue as intimately relat- 
ed to the Sino-Indian border dispute. A series of border talks has 
been held annually since 1984 between the ministers of foreign of 
affairs of Bhutan and China, leading to relations that have been 
characterized by the two sides as "very good." 

Other Countries 

Bhutan, the second nation to do so, recognized the newly in- 
dependent Bangladesh in 1971, and diplomatic relations were es- 
tablished in 1973. Bangladesh was the only country other than India 
with which Bhutan had diplomatic relations at the time and, in 
the view of some foreign observers, perhaps the only country with 
which India would have allowed Bhutan to develop bilateral rela- 
tions. For Bhutan, however, the step was an important symbolic 
move that provided a new trade outlet as well as another access 
to the sea. Water and flood control, a major multilateral issue in- 
volving the great Himalayan watersheds that run through China, 
Bhutan, and India into flood-prone Bangladesh have been peren- 
nial concerns between Thimphu and Dhaka. 

Bhutan, with its sizeable Nepalese minority, has been particu- 
larly cautious in its relations with Nepal in deference to Indian sen- 
sitivities. In 1969 the Nepal-Bhutan Friendship and Cultural Society 
was established in Kathmandu to facilitate good relations, but for- 
mal diplomatic ties were not established until 1983, the same year 
SAARC was founded. Given the ethnic unrest among Nepalese 
in Bhutan, at the request of the Nepal-Bhutan Friendship and Cul- 
tural Society, the Bhutan-Nepal Friendship Association was formed 
in 1989 to help defuse tensions. 

Participation in International Organizations 

Historically, Bhutan's foreign relations had been limited primarily 



333 



Nepal and Bhutan: Country Studies 

to contacts with Tibet, India, and Britain. A major step was taken 
in the 1960s as Bhutan began to join international organizations. 
It first became a member of the Colombo Plan in 1962, which put 
the kingdom into contact with member states throughout South 
Asia and Southeast Asia for purposes of fostering cooperative eco- 
nomic development. Bhutan joined the Universal Postal Union in 
1969, putting it into contact with some 137 countries. UN mem- 
bership was achieved in 1971, followed by the gaining of seats in 
the UN's specialized and related agencies, including the Interna- 
tional Monetary Fund (IMF — see Glossary) and the World Bank. 
A founding member of SAARC in 1983, Bhutan had also estab- 
lished relations with the Coordination Bureau of the Nonaligned 
Countries (the headquarters of the Nonaligned Movement), the 
Group of 77, the Asian Development Bank, and the European 
Community. By 1990, Bhutan belonged to 119 international, 
regional, and special interest organizations (see table 32, Appendix). 

In 1975 Bhutan and four other landlocked Asian countries (Af- 
ghanistan, Laos, Mongolia, and Nepal) were granted special sta- 
tus as "least developed landlocked countries" by the UN Economic 
and Social Commission for Asia and the Pacific (ESCAP) in coor- 
dination with the United Nations Conference on Trade and De- 
velopment (UNCTAD) and UNDP. Despite these organizations' 
intentions to assist Bhutan and the other countries in dealing with 
international transit problems, Bhutan declined to participate in 
their work. 

Perhaps the most significant international participation Bhutan 
embarked on in the 1980s was membership in SAARC. SAARC 's 
agenda excluded bilateral issues and political programs from the 
organization's debates and confined committee and summit dis- 
cussions to areas where member nations must find common ground 
for achieving mutual economic benefit. Bhutan became involved 
in useful working group discussions on agriculture and livestock, 
rural development, meteorology, telecommunications, science and 
technology, health and population, transportation, postal cooper- 
ation, and trade and industrial cooperation. 

Heads-of-state meetings of SAARC have taken Jigme Singye 
Wangchuck abroad on several occasions. The integration of Bhu- 
tan into SAARC activities also involved the country with a varie- 
ty of issues of concern to poor undeveloped nations as well as 
increasing its participation in the Nonaligned Movement. In Bhu- 
tan's extensive multilateral diplomatic activities in the 1980s, offi- 
cials saw their country emerging as an "Eastern Geneva" providing 
a "venue for peace-making efforts in South Asia." 



334 



Bhutan 



National Security 
Strategic Location 

Bhutan is a strategic buffer state wedged between India and Chi- 
na. After centuries of close ties to Tibet and less definite connec- 
tions to China, Bhutan developed a southerly political orientation, 
first with British India and then with independent India. British 
troops in or near Bhutan presented a considerable deterrent to Chi- 
na from the eighteenth century until the early twentieth century. 
Britain's withdrawal from India in 1947 and India's replacement 
of Britain as Bhutan's protector coincided with the communist mili- 
tary victory in China in 1949. 

Because of its location in India's strategic defense system, Bhu- 
tan has long had foreign defense arrangements, first with Britain 
and then with independent India. Despite common international 
policy goals of Indian and Chinese leaders, territorial problems be- 
tween the two powers continued to define Bhutan's buffer status. 
The 1962 border war between India and China had serious impli- 
cations for Bhutan and could have embroiled it in the fighting. 
Thimphu permitted Indian troops to cross Bhutanese territory and 
Chinese airplanes allegedly violated Bhutanese air space. In addi- 
tion, China reportedly had six divisions stationed near the bor- 
ders of Bhutan, Sikkim, and Nepal. China had its own boundary 
disputes with Bhutan, and Chinese troops reportedly breached the 
Bhutanese frontier on several occasions in 1966, 1970, and 1979. 
In each case, New Delhi attempted to represent Thimphu's interests 
in protest notes to Beijing, all of which were rejected. 

As the Chinese threat grew, India became increasingly involved 
in the buildup of Bhutan's indigenous defensive capability, spe- 
cifically in the training and equipping of the Royal Bhutan Army 
(see Armed Forces, this ch.). The headquarters of the Indian Mili- 
tary Training Team (IMTRAT) in Bhutan was located in Ha Dis- 
trict, which is adjacent to Tibet's Chumbi Valley, where China 
routinely kept large concentrations of troops, at the junction of the 
Bhutanese, Indian, and Chinese borders. 

The 1949 Indo-Bhutanese treaty makes no reference to India's 
defense of Bhutan except what might be inferred from Article 2 
of the treaty. Prime Minister Nehru, however, declared in 1958 
that acts of aggression against Bhutan would be taken as acts of 
aggression against India itself. Also, by the terms of the 1949 treaty, 
Bhutan has the right to import arms, munitions, and other mili- 
tary materiel from or through India as long as the Indian govern- 
ment is satisfied that such imports do not threaten India. Bhutan, 
on the other hand, agreed not to export or allow private citizens 



335 



Nepal and Bhutan: Country Studies 

to export any arms, ammunition, or military equipment. The In- 
dian Ministry of Defence also made provisions for the rapid deploy- 
ment of helicopter-borne troops to Bhutan in the event of a Chinese 
invasion and made related plans for air force operations. Sugges- 
tions from within the Bhutanese government to allow Indian troops 
to be stationed in Bhutan were rejected. An important defensive 
consideration has been the construction of extensive roads with 
major assistance from the Indian government's paramilitary Border 
Roads Organization. 

Armed Forces 

The Royal Bhutan Army was organized as a regular military 
force in the 1950s with the encouragement of India and in response 
to China's takeover of Tibet. Following the establishment of a na- 
tional militia in 1958, the government announced a new conscrip- 
tion system the same year and plans for a standing army of 2,500 
troops with modern equipment. Military training was given to all 
able-bodied men, and by 1963 the standing army was well estab- 
lished. A reorganization in 1968 led several years later to an in- 
crease in the army to 4,850 troops and a campaign aimed at 
recruiting 600 additional troops per year. In 1990 the Royal Bhu- 
tan Army was composed of 6,000 men and was backed by a grow- 
ing militia. Two women were recruited for the army's airport 
security unit in 1989, but no other women soldiers have been noted. 

The army's primary mission was border defense, but it also has 
assisted the Royal Bhutan Police in performing internal security 
duties (see Police Force, this ch.). The army also provided securi- 
ty at the Paro airport and regulated the sale, ownership, and licens- 
ing of civilian-owned firearms. For ceremonial occasions, the army 
had a band, some members of which were trained in India. 

The army's supreme commander in 1991 was the Druk Gyal- 
po; day-to-day operations were under the charge of the chief oper- 
ations officer. The chief operations officer held the rank of colonel 
until 1981, when the position was upgraded to major general (see 
table 33, Appendix). In 1991 the chief operations officer was Major 
General Lam Dorji. Organizationally, the army headquarters 
ranked at the ministry level and was immediately subordinate to 
the Council of Ministers. 

As of 1978, the Royal Bhutan Army consisted of its headquar- 
ters in Thimphu, a training center at Tenchholing, four operational 
wings, and an airport security unit at Paro. Wing 1 had its head- 
quarters in Changjukha (Geylegphug), Wing 2 at Damthang, Wing 
3 at Goinichawa, and Wing 4 at Yonphula. Organized into com- 
panies, platoons, and sections, the troops were assigned to the 



336 



Royal Bhutan Army camp at Tashi Makhang, Punakha District 
Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

wings deployed primarily in border areas. The army also operated 
hospitals in Lungtenphug, Wangdiphodrang, and Yonphula. 

Most if not all of the army's weapons in the 1980s were manufac- 
tured in India. Rifles, bayonets, machine guns, and 81mm mor- 
tars have been noted in the army's weapons inventory, but some 
were believed to be obsolescent. Figures on defense expenditures 
were not publicly available and, in budgetary information pub- 
lished by the Planning Commission, were found only in general 
government costs. 

The army has traditionally been a small, lightly armed conscript 
force. The majority of its officers and noncommissioned officers 
were trained by IMTRAT, which was commanded by an Indian 
Army brigadier at the Wangchuck Lo Dzong Military Training 
School, established in 1961 in Ha District. Recruits were trained 
at the Army Training Centre established in 1957 at Tenchholing 
in Wangdiphodrang District. IMTRAT also offered a one-to-two- 
month precourse for officers and enlisted personnel selected for 
advanced training in India. Royal Bhutan Army cadets were sent 
to the Indian National Defence Academy at Pune, followed by train- 
ing at the Indian Military Academy at Dehra Dun, from which 
they were commissioned as second lieutenants. It was reported 
in 1990 that members of the Royal Body Guards (an elite VIP 



337 



Nepal and Bhutan: Country Studies 

protection unit commanded by a lieutenant colonel) had completed 
counterinsurgency and jungle warfare training in the Mizo Hills 
in India, the Indian College of Combat, and the Indian Military 
Academy. 

The army conducted an annual recruitment drive. Families with 
two or more sons were expected to have one son serve in the army. 
Individuals between sixteen and twenty-four years of age, having 
a minimum height of 150 centimeters and minimum weight of fifty- 
two kilograms, were eligible for recruitment. Selected from among 
volunteers and conscripts, recruits were given ten to twelve months 
of basic training that included weapons proficiency, "field craft," 
signals, map reading, tae kwon do, and physical fitness. Soldiers 
also were expected to achieve proficiency in Dzongkha, Nepali, 
and English. Annual salaries started at Nu300 plus food, cloth- 
ing, and accommodations. 

Since the 1970s, one of the army's goals has been self-sufficiency. 
The Army Welfare Committee was established in 1978 to oversee 
the Army Welfare Project, which provided housing, food, and in- 
come for the Royal Bhutan Army and the Royal Body Guards. 
It was charged with taking care of individual army personnel 
problems and providing pensions to retirees. Although some labor 
for the Army Welfare Project was provided by army personnel, 
the project was administered by civil service employees and con- 
tractors. By 1979 a pilot project, the Lapchekha Agriculture Farm 
in Wangdiphodrang District, had been established to provide food 
for army units in western Bhutan. The farm comprised 525 hect- 
ares with a potential for an additional 113 hectares of arable land. 
Army personnel constructed a twenty-one-kilometer-long canal to 
irrigate the farm and worked there for three months each year. 
Revenues from the farm and other welfare projects helped provide 
benefits to retired and disabled personnel in the form of pensions 
and loans and, in the case of landless retirees, agricultural land 
grants. Army careerists could retire, depending on their rank, be- 
tween the ages of thirty-seven and forty-five years of age. Preretire- 
ment training in farming was provided to army personnel. All 
retirees received pensions, and those disabled during service 
received both a pension and free medical care. In 1985 the Army 
Welfare Project generated Nu40 million in sales of farm services 
and products, which ranged from such practical civil activities as 
fence electrification to protect sugarcane farms from wild elephants 
in Geylegphug District to entrepreneurial endeavors, such as the 
manufacture and sale of rum to the Indian Army and Indian Air 
Force. 



338 



Bhutan 



Paramilitary 

Militia 

Historically, the government raised militia forces during times 
of crisis during the period of theocratic rule (1616-1907). They were 
commanded by a dapon (arrow chief in Dzongkha). In modern 
times, a 5, 000- strong militia was raised in 1958 as part of the defen- 
sive strategy against China. Militia personnel were trained by army 
officers who had been trained at the Indian Military Academy. 
Their primary function was as a first line of defense along frontier 
areas with China. Following an Indian inspection tour in 1961, 
the government was advised to step up militia recruitment. In 1967 
the militia was reorganized on a national basis, with compulsory 
military training being given for three months each year for three 
years to men twenty to twenty-five years of age. After the initial 
three-year training phase, militia personnel were placed on reserve 
status. 

In a move said by the Druk Gyalpo to reinforce Bhutan's secu- 
rity, new militia training was initiated in 1989. In the early 1980s, 
weapons training for all male citizens between ages sixteen and sixty 
was considered, but, in view of national security and public works 
projects to which the army already was committed, it was post- 
poned. In 1990 ninety-four students were enlisted in a program 
at the Tenchholing army camp. Candidates for militia training in- 
cluded individuals who had completed at least the tenth grade, new 
college graduates, and members of the civil service. Starting in 1989, 
new male civil service entrants were required to take a three-week 
militia training course. 

In reaction to the "prodemocracy" demonstrations by ethnic 
Nepalese in southern Bhutan in September 1990, the government 
announced that more than 1,000 citizens had volunteered to join 
militia groups. The army was to provide training for around 500 
militia members to assist the "badly under strength" police in deal- 
ing with mob attacks. Recruits were men and women from among 
civil servants and urban residents. Militia trainees pledged to give 
their "full support and loyalty" to tsawa sum (country, king, and 
people) and a total commitment to defend the nation. 

Forest Guards 

The Forest Guards, a uniformed government service with 
paramilitary capabilities, had been in existence since the early 1970s. 
Under the jurisdiction of the Department of Forestry, Forest Guards 
were trained in two six-month classes per year at the Forestry 
School. Recruits learned first aid, forest-fire fighting, marksmanship, 



339 



Nepal and Bhutan: Country Studies 

physical training, and traditional Bhutanese customs. Small arms 
training was imparted by the Royal Bhutan Army. Besides guarding 
Bhutan's important forest resources, the Forest Guards provided 
border- security support to the Royal Bhutan Police. 

Police Force 

The Royal Bhutan Police was established with personnel reas- 
signed from the army on September 1, 1965, a day thereafter 
marked as Police Day throughout Bhutan. Starting with only a few 
hundred personnel in 1965, by the late 1970s the force had more 
than 1,000 constables and officers. Recruits — grade six graduates 
and above — were trained at the Police Training Centre in Zilnon 
Namgyeling, Thimphu District, and, after 1981, at a police train- 
ing center in Jigmiling, Geylegphug District. The curriculum con- 
sisted of weapons training, tae kwon do, physical training with and 
without arms, law, simple investigation techniques, "turn-out 
drill," check-post duties, traffic control, public relations, and driglam 
namzha. Recruits were also trained for other unspecified duties and 
to escort important visitors. 

Since the establishment of the police force in 1965, Indian police 
advisers and instructors have been used. Starting in 1975, Bhutanese 
instructors, trained in India for one year, began training recruits 
at the Zilnon Namgyeling Police Training Centre. Advanced train- 
ing for selected police officers in fields such as criminology, traffic 
control, and canine corps has taken place in India and other coun- 
tries. In 1988, following specialized training in India, a female 
second lieutenant established a fingerprint bureau in Thimphu. 
Besides having access to training at the Indian Police Academy in 
Hyderabad, some students were also sent to the Police Executive 
Development Course in Singapore. 

Besides performing their standard police functions, members of 
the Royal Bhutan Police also served as border guards and firefight- 
ers and provided first aid. In 1975, in response to the increased 
number of traffic accidents resulting from the development of roads 
and the increased number of motor vehicles, the police established 
an experimental mobile traffic court staff with Royal Bhutan Police 
personnel and a judicial official to make on-the-spot legal decisions. 

Organizationally subordinate to the Royal Bhutan Army, the 
Royal Bhutan Police in 1991 was under the command of Major 
General Lam Dorji, who was also chief of operations of the army, 
under the title inspector general or commandant. There were police 
headquarters in each district and subdistrict. 



340 




Traffic control on Norzin Lam, Thimphu's main street 
Courtesy Bhutan Travel, Inc., New York (Marie Brown) 

Legal System 

Criminal Justice 

Bhutan's civil and criminal codes are based on the Tsa Yig, a 
code established by the shabdrung in the seventeenth century. The 
Tsa Yig was revised in 1957 and ostensibly replaced with a new 
code in 1965. The 1965 code, however, retained most of the spirit 
and substance of the seventeenth-century code. Family problems, 
such as marriage, divorce, and adoption, usually were resolved 
through recourse to Buddhist or Hindu religious law. In modern 
Bhutan, village heads often judged minor cases and district offi- 
cials adjudicated major crimes. 

Trials in the 1980s were public, and it was the practice of the 
accuser and the accused personally to put their cases to judges. 
There were no lawyers in Bhutan's legal system until the 1980s, 
and decisions were made on the facts of each case as presented by 
the litigants. Judges appointed by the Druk Gyalpo were respon- 
sible for investigations, filing of charges, prosecution, and judg- 
ment of defendants. Serious crimes were extremely rare throughout 
the twentieth century, although there were reports of increased 
criminal activity in the 1980s and early 1990s with the influx of 



341 



Nepal and Bhutan: Country Studies 

foreign laborers, widening economic disparities, and greater con- 
tact with foreign cultures. 

Penal Code 

Arrests can be made only under legal authority. Exile, stated 
as a punishment in the 1953 Constitution of the National Assem- 
bly, and its 1968 revision, is not used as a form of punishment, 
and mutilation was abolished in 1965. Fines, according to various 
reports, ranged from the equivalent of US$10 to US$55, and jail 
sentences from seven days to one month were levied against citizens 
who violated a compulsory but not widely enforced 1989 royal 
decree that they wear the national dress at formal gatherings to 
preserve and promote Bhutanese culture. With respect to interna- 
tional criminal law, in 1988 the National Assembly ratified a 
SAARC convention on terrorism, which Bhutan has consistently 
condemned in international forums. It provided for extradition of 
terrorists. 

The last half of the twentieth century was a momentous period 
in Bhutan's long historical development. The nation moved from 
a traditional system of governance to a de facto constitutional 
monarchy while retaining its firm Buddhist religious basis. Physi- 
cal isolation was overcome with major road construction and ad- 
vances in telecommunications that linked the various parts of the 
country and gave greater access to the outside world. Internation- 
al air travel brought tourism and greater amounts of foreign ex- 
change needed for economic development. Having observed the 
problems encountered by other developing nations, Bhutan sought 
a more controlled economic and infrastructure development with 
the assistance of major foreign and international organizations. 
Once exclusively reliant on India for trade and aid, the kingdom 
broadened its import/export base and diversified its sources of eco- 
nomic assistance markedly during this period. 

Despite these positive achievements, Bhutan faced serious po- 
litical problems in the early 1990s. The Nepalese minority in 
southern Bhutan had been a source of serious ethnic disturbances 
and even terrorist acts, and its demands for greater participation 
in the political process had been on the rise since the mid-1980s. 
The threat to the indigenous population of gradually being out- 
numbered by politically active immigrant Nepalese raised for Bhu- 
tan's leaders the specter of Sikkim's annexation by India in 1974, 
when that kingdom's indigenous Buddhist people became a minority 
in their own country and lost political power. The question of how 
to modernize the nation politically remained a crucial one, and 



342 



Bhutan 



Bhutan's independence and sovereignty hung in the balance as the 
1990s progressed. 

* * * 

The annual writings of Brian Shaw in the Far Eastern Econom- 
ic Review's Asia Yearbook, Statesman's Year- Book, and Europa's The 
Far East and Australasia and Europa World Year Book provide an ex- 
cellent and up-to-date overview of all facets of Bhutanese history, 
society, economy, politics, and other sectors. Bhutan: The Early His- 
tory of a Himalayan Kingdom by Michael Aris provides a detailed view 
of Bhutan's historical origins as derived from Bhutanese primary 
sources. Bhutan's general history is well covered in History of Bhu- 
tan by Bikrama Jit Hasrat. The Bhutan Planning Commission's 
Statistical Yearbook of Bhutan provides copious information on many 
sectors of society and the economy. Social and economic develop- 
ments are cogently presented in Pradyumna P. Karan's Bhutan: 
Development Amid Environmental and Cultural Preservation, and his earlier 
book, Bhutan: A Physical and Cultural Geography, provides key infor- 
mation on geography. The World Bank's Bhutan: Development in 
a Himalayan Kingdom and Bhutan: Development Planning in a Unique 
Environment are excellent analyses of economic development. Arti- 
cles by Sukhdev Shah and S.W.R. de A. Samarasinghe in Asian 
Survey also provide useful analyses of the economy of Bhutan. Po- 
litical developments from the seventeenth to the mid-twentieth cen- 
tury are well presented in Leo E. Rose's The Politics of Bhutan. The 
weekly official newspaper Kuensel [Thimphu] is a good source of 
current official information on government and popular activities. 
To keep abreast of subsequent publications on Bhutan, the Associ- 
ation for Asian Studies' annual Bibliography of Asian Studies should 
be consulted. (For further information and complete citations, see 
Bibliography.) 



343 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Nepal: Population Growth, Selected Years, 1911-2001 

3 Nepal: Population Density and Agricultural Density by 

Region, 1961, 1971, and 1981 

4 Nepal: Lifetime Regional Migration, 1971 and 1981 

5 Nepal: Reasons for Lifetime Regional Migration by Region 

and Sex, 1981 

6 Nepal: Reasons for External Absentee Migration by Region 

and Sex, 1981 

7 Nepal: Distribution of Population by Mother Tongue, 1981 

8 Nepal: Distribution of Land by Region and Size of Holding, 

1981 

9 Nepal: Planned Expenditures in the Public Sector, 1970-90 

10 Nepal: Public Sector Development Expenditures and Foreign 

Aid, 1956-90 

11 Nepal: Government Budget, Fiscal Years, 1987-90 

12 Nepal: Direction of Foreign Trade, Fiscal Years, 1989, 1990, 

and 1991 

13 Nepal: Exports to India by Commodity Group, Fiscal Years 

1986-89 

14 Nepal: Exports by Country, Fiscal Years 1985-88 

15 Nepal: Exports by Commodity Group, Fiscal Years 1986-89 

16 Nepal: Imports by Country, Fiscal Years 1985-88 

17 Nepal: Imports by Commodity Group, Fiscal Years 1986-89 

18 Nepal: Disbursement of Foreign Loans and Grants, Selected 

Fiscal Years, 1984-90 

19 Nepal: Disbursement of Foreign Aid, Fiscal Years 1976-86 

20 Nepal: Power and Irrigation Facilities, 1956-90 

21 Nepal: Production of Principal Crops, Fiscal Years 1986-89 

22 Bhutan: Climatic Statistics, Selected Stations, 1988 

23 Bhutan: Population by District, 1969 and 1980 

24 Bhutan: Gross Domestic Product by Sector, Selected Years, 

1981-91 

25 Bhutan: Value and Growth Rate of Gross Domestic Product, 

Selected Years, 1980-91 

26 Bhutan: Allocation and Sources of Funds under Development 

Plans, 1961-92 



345 



Nepal and Bhutan: Country Studies 

Table 

27 Bhutan: Allocation of Funds under Development Plans by Sec- 

tor or Business, 1961-92 

28 Bhutan: Major Trade with India, Selected Years, 1981-87 

29 Bhutan: Foreign Trade, Fiscal Years 1982-89 

30 Bhutan: Balance of Payments, Selected Fiscal Years, 1982-88 

31 Bhutan: Diplomatic Relations with Other Nations, 1990 

32 Bhutan: Membership in Major International Organizations, 

1990 

33 Bhutan: Ranks in the Royal Bhutan Army, 1991 



346 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 


When you know 


Multiply by 


To find 




0.04 


inches 




0.39 


inches 






feet 




0.62 


miles 


Hectares (10,000 m 2 ) 


2.47 


acres 




0.39 


square miles 




35.3 


cubic feet 




0.26 


gallons 




2.2 


pounds 




0.98 


long tons 




1.1 


short tons 




2,204 


pounds 




L*-t71 1.8 


degrees Fahrenheit 


(Centigrade) 


and add 32 





Table 2. Nepal: Population Growth, Selected Years, 1911-2001 



Population Growth Rate 

Year (in thousands) (in percentages) 



1911 5,639 n.a. 

1921 5,574 -0.13 

1931 5,533 -0.07 

1941 6,284 1.16 

1952/54 8,473 2.27 

1961 9,413 1.64 

1971 11,556 2.05 

1981 15,023 2.62 

2001 * 23,593 2.30 



n.a. — not applicable. 

* Projected as medium variant. 

Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1988, Kathmandu, 1988, 21. 



347 



Nepal and Bhutan: Country Studies 



Table 3. Nepal: Population Density and Agricultural Density by Region, 
1961, 1971, and 1981 



Region 


1961 1 


1971 


1981 


Population density 2 












99 


9^ 






99 


117 




101 


128 


193 


NEPAL 


64 


79 


102 


Agricultural density 3 












9.3 


10.6 






6.5 


7.6 




2.4 


3.1 


4.7 


NEPAL 


3.8 


4.7 


6.1 



n.a. — not available. 

1 Mountain and Hill regions together had population density figure of 53 and agricultural density figure 
of 5.6. 

2 Persons per square kilometer of total land. 

3 Persons per hectare of cultivable land. 



Source: Based on information from Nanda R. Shrestha, Landlessness and Migration in Nepal, 
Boulder, Colorado, 1990, 121. 



Table 4. Nepal: Lifetime Regional Migration, 1971 and 1981 



Place of Birth 

Mountain Hill Tarai 

Place of Enumeration Year Region Region Region Total 



Mountain Region 1971 n.a. 9,258 440 9,698 

1981 n.a. 33,423 2,196 35,619 

Hill Region 1971 15,667 n.a. 9,699 25,366 

1981 134,254 n.a. 35,669 169,923 

Tarai Region 1971 33,990 376,074 n.a. 410,064 

1981 162,832 561,211 n.a. 724,043 

TOTAL 1971 49,657 385,332 10,139 445,128 

1981 297,086 594,634 37,865 929,585 * 



n.a. — not applicable. 

* Excludes migration flows within the same region; including these flows would bring the total to 
1,272,300 persons. 

Source: Based on information from Nanda R. Shrestha, Landlessness and Migration in Nepal, 
Boulder, Colorado, 1990, 27. 



348 



Appendix 



iO i-H CO »-H CD CM 



CM <0 C7> CO O © 



CM CM CO 



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'2 § 



co cm cm co m m 

M if) if) « « (N 



lonoa 

O CM CM O 



3 S 



in 6 •* 6 « 



Ol CM CM Ol CM 



ifnom o « * 
<o cb »-i oS en 



= 1 



n cm r- O 



io a m co m co 



■>*< r~ r- <£> -*< 



o 



~ ■«*« ~ in 
id n « 6 6 



* cm in cm « 



£5 C 

C 3 

3 O 

o 5 



en n cn cm id c?) 



to * en cm cm cm 
O in o O <-b 



5 S 



3 « « « | 
< c/2 go Z 



C 3 

RJ .±2 



C 
— 

r 



Si 



349 



Nepal and Bhutan: Country Studies 



T3 u 

V V 

s -s 

£ O 

S ^ 



-o 3 



™ CM 

c 



o o 
— o 



CO 
CM CO 
CO 



00 CM 



00 

CO 



is 



1f|11 



e bo 

3 s- «J 

o z ^ 



co o 

<£> o 



28 
of 

00 

CM 



O CO 



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CM 



be 



u 
bo 
u <$ 



.2 | 



^ Tg 2 cu 



ii £ u 
£ 2 a< 



2 Pu 



350 



Appendix 




351 



Nepal and Bhutan: Country Studies 



Table 7. Nepal: Distribution of Population 
by Mother Tongue, 1981 



Mother Tongue 


Number 


Percentage 




8,767,361 


58.4 




1,668,309 


11.1 


Bhojpuri 


1,142,805 


7.6 




545,685 


3.6 




522,416 


3.5 


Newari 


448,746 


3.0 


Abadhi 


234,343 


1.5 




221,353 


1.5 




212,681 


1.4 




174,464 


1.2 




1 9Q 






73,589 


0.5 




59,383 


0.4 




22,403 


0.1 




13,522 


0.1 




10,650 


0.1 




5,804 






5,289 




Other 


764,802 


5.1 


TOTAL 


15,022,839 


100.0 



— means negligible. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1988, Kathmandu, 1988, 24. 



352 



Appendix 



Table 8. Nepal: Distribution of Land by Region and Size of Holding, 1981 

(in hectares) 



Region 


Under 0.5 


0.5 to 1.0 


1.0 to 3.0 


3.0 to 5.0 


Over 5.0 


Total 


Mountain Region 














Households 
















. 131,703 


37,767 


23,423 


2,534 


2,151 


197,578 


Percentage . . . 


66.7 


19.1 


11.8 


1.3 


1.1 


100.0 


Holdings 
















24,563 


27,787 


31,403 


9,842 


28,992 


122,587 


Percentage . . . 


. 20.0 


22.7 


25.6 


8.0 


23.7 


100.0 


Average holding 


0.2 


0.7 


1.3 


3.9 


13.5 


0.6 


Hill Region 














Households 
















541,988 


194,403 


250,203 


41,468 


17,158 


1,045,220 


Percentage . . . 


51.9 


18.6 


23.9 


4.0 


1.6 


100.0 


Holdings 
















. 98,731 


145,776 


375,079 


157,383 


162,735 


939,704 


Percentage . . . 


10.5 


15.5 


39.9 


16.7 


17.4 


100.0 


Average holding 


0.2 


0.7 


1.5 


3.8 


9.5 


0.9 


larai Region 














T T „ 1 1 J „ 

riouseholds 
















A1A om 


1 OQ QCLA 
lZO,ZDV 


zoz, job 


1 R CC1 

/o,oo/ 


00, 04-0 


OK 1 1 CO 

yol , loo 


Percentage . . . 




1 3 C\ 


97 A 
Z. 1 .0 


q n 
o.U 


O.o 


1 nn n 

1UU.U 


Holdings 














Number ...... 


QO *7 A C 

jo,7(JD 


yi,jo7 


ACQ CO 1 

4b0,021 


OOO A A1 

^00,44:/ 


519,386 


1 A f\i A OC 

1 ,4Ul,42o 


Percentage . . . 


7 


o.o 


33 1 


ZU.O 


37 1 


1 nn n 


Average holding 


0.1 


0.7 


1.8 


3.8 


9.3 


1.5 


TOTAL 














Households 














Number 


1,107,901 


355,420 


536,012 


119,669 


74,954 


2,193,956 


Percentage . . . 


50.5 


16.2 


24.4 


5.5 


3.4 


100.0 


Holdings 














Number 


. 161,999 


264,930 


870,003 


455,672 


711,113 


2,463,717 


Percentage . . . 


6.6 


10.7 


35.3 


18.5 


28.9 


100.0 


Average holding 


0.2 


0.8 


1.6 


3.8 


9.5 


1.1 



Source: Based on information from Nanda R. Shrestha, Landlessness and Migration in Nepal, 
Boulder, Colorado, 1990, 127. 



353 



Nepal and Bhutan: Country Studies 

Table 9. Nepal: Planned Expenditures in the Public Sector, 1970-90 
(in percentages) 

Fourth Plan Fifth Plan Sixth Plan Seventh Plan 



Sector (1970-75) (1975-80) (1980-85) (1985-90) 



Agriculture 26.0 30.0 29.4 30.6 

Transportation 41.2 25.4 20.6 17.7 

Industry 18.4 21.2 21.9 26.0 

Social services 14.4 23.5 28.1 25.7 



TOTAL * 100.0 100.0 100.0 100.0 



• Figures may not add to total because of rounding. 

Source: Based on information from Badri Prasad Shreshtha, Nepalese Economy in Retrospect 
and Prospect, Kathmandu, 1990, 22. 



Table 10. Nepal: Public Sector Development Expenditures 
and Foreign Aid, 1956-90 
(in millions of rupees) 1 

Foreign Aid 

Planned Percentage of 

Development Development 



Period Expenditures Value Expenditures 



First Plan (1956-61) 382.9 2 382.9 100.0 

Second Plan (1962-65) 614.7 478.3 77.8 

Third Plan (1965-70) 1,639.1 919.2 56.1 

Fourth Plan (1970-75) 3,356.9 1,509.1 45.0 

Fifth Plan (1975-80) 8,832.5 4,240.8 48.0 

Sixth Plan (1980-85) 22,090.1 10,585.2 47.9 

Seventh Plan (1985-90) 29,000.0 20,480.0 70.6 

1985- 86 6,213.3 3,491.5 60.1 3 

1986- 87 7,377.9 3,990.9 68.8 3 

1987- 88 9,428.0 5,892.6 62.5 3 



1 For value of the rupee — see Glossary. 

2 Actual amount disbursed. 

3 As published. 

Source: Based on information from Babu Ram Shrestha, Managing External Assistance in Nepal, 
Kathmandu, 1990, 45, 118-19. 



354 



Appendix 



Table 11. Nepal: Government Budget, Fiscal Years 1987-90 
(in millions of rupees) 1 





1987 


1988 


1989 2 


1990 3 


Expenditures 










Regular 


4,135.2 


4,676.9 


5,765.1 


6,651.2 


Development 


7 378 


9,428.0 


9,495.5 


13,590.7 


Total expenditures 


11 513 2 


14,104.9 


15,260.6 


20,241.9 


Revenues 












. .. 5,975.1 


7,350.4 


7,540.7 


8,500.6 




. .. 1,285.1 


2,076.8 


1,817.9 


8,000.6 




. . . 7,260.2 


9,427.2 


9,358.6 


16,501.2 




4,253.0 


4,677.7 


5,902.0 


3,740.7 


Loans 












. . . 2,705.8 


3,815.8 


4,169.4 


7,767.4 




. .. 1,644.7 


1,130.0 


1,130.0 


1,750.0 




, . . 4,350.5 


4,945.8 


5,299.4 


9,517.4 


Cash balance (- means surplus) 4 . . 


-97.5 


-268.0 


602.6 


n.a. 



n.a. — not available. 

1 For value of the rupee — see Glossary. 

2 Revised estimate. 

3 Estimate. 

4 Figures may not add to total because of rounding. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
199. 



Table 12. Nepal: Direction of Foreign Trade, Fiscal Years 1989, 
1990, and 1991 
(in millions of rupees) 1 

1989 1990 2 1991 3 



Exports 

India 1,034.9 666.6 1,348.0 

Other 3,160.4 4,568.9 4,182.1 

Total exports 4,195.3 5,235.5 5,530.1 

Imports 

India 4,238.7 4,646.3 5,574.5 

Other 12,025.0 13,755.2 11,281.9 

Total imports 16,263.7 18,401.5 16,856.4 

Trade balance 

India -3,203.8 -3,979.7 -4,226.5 

Other -8,864.6 -9,186.3 -7,099.8 

Total trade balance -12,068.4 -13,166.0 -11,326.3 



1 For value of the rupee — see Glossary. 

2 Provisional. 

3 Provisional; first nine months of fiscal year. 

Source: Based on information from Nepal Rastra Bank, Research Department, Main Eco- 
nomic Indicators, Kathmandu, February-April 1991, Table 17. 



355 



Nepal and Bhutan: Country Studies 



Table 13. Nepal: Exports to India by Commodity Group, Fiscal Years 

1986-89 1 
(in millions of rupees) 2 



Commodity Group 


1986 


1987 


1988 


1989 3 




573.0 


560.0 


773.2 


463.1 


Tobacco and beverages 


0.1 


2.7 


1.8 


1.1 


Crude materials and inedibles, except 












364.5 


460.0 


390.0 


212.4 




0.2 


0.2 


0.8 




Animal and vegetable oils and fats 


56.0 


73.8 


144.1 


94.8 


Chemicals and drugs 


1.0 


1.2 


11.1 


16.5 


Manufactured goods classified chiefly by 












201.7 


193.1 


228.5 


180.2 


Machinery and transportation equipment . 


37.5 


0.9 


0.1 


4.2 


Miscellaneous manufactured goods 


6.8 


10.8 


15.7 


18.3 


Other 


0.3 


0.2 


2.5 




TOTAL 


1,241.1 


1,302.9 


1,567.8 


990.6 



— means negligible. 

1 Based on customs data. 

2 For value of the rupee — see Glossary 

3 Provisional. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
252. 



Table 14. Nepal: Exports by Country, Fiscal Years 1985-88 * 
(in percentages) 



Country 1985 1986 1987 1988 



Bangladesh — — 0.3 — 

Britain 9.4 6.1 10.1 10.0 

China n.a. n.a. — — 

Hong Kong 1.5 2.8 0.7 0.3 

Japan 1.2 0.6 1.6 0.8 

Pakistan — 0.1 0.1 — 

Singapore 6.2 12.3 6.4 1.2 

Soviet Union 8.6 3.8 2.6 1.6 

United States 43.2 45.8 36.5 37.1 

West Germany 13.1 13.7 18.2 26.7 

Other 16.8 14.8 23.5 22.3 



TOTAL 100.0 100.0 100.0 100.0 



— means negligible, 
n.a. — not available. 
* Excluding India, 

Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
243. 



356 



Appendix 



Table 15. Nepal: Exports by Commodity Group, Fiscal Years 1986-89 1 
(in millions of rupees) 2 



Commodity Group 


1986 


1987 


1988 


1989 3 




835.6 


703.7 


804.4 


540.5 


Tobacco and beverages 


0.2 


3.5 


10.1 


5.0 


C^niHf* material? anH inpHiHl**^ r f*T\t 












412.9 


491.1 


513.7 


245.2 




0.2 


0.2 


0.8 


n.a. 


Animal anH vpcxptPinlp nm ann tstt<t 


61.3 


117.1 


171.5 


98.1 




2.5 


2.0 


12.6 


24.3 


Manufactured goods classified chiefly 












900.0 


1,009.6 


1,601.6 


1,986.5 


Machinery and transportation 












38.6 


2.6 


0.5 


5.7 


Miscellaneous manufactured goods 


826.5 


661.5 


996.9 


1,250.1 


Other 


0.3 


0.2 


2.5 


n.a. 


TOTAL 


3,078.1 


2,991.5 


4,114.6 


4,155.4 



n.a. — not available. 

1 Based on customs data. 

2 For value of the rupee — see Glossary. 

3 Provisional. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
249. 



Table 16. Nepal: Imports by Country, Fiscal Years 1985-88 * 
(in percentages) 



Country 


1985 


1986 


1987 


1988 




6.4 


1.9 


3.0 


3.0 




6.4 


5.8 


4.4 


5.6 




2.8 


3.5 


3.2 


2.6 


Japan 


22.3 


28.7 


22.9 


20.8 




5.1 


6.4 


12.4 


13.1 




10.1 


8.8 


9.2 


6.9 




11.3 


3.4 


0.1 


4.6 




2.2 


2.0 


2.5 


1.8 




3.1 


3.3 


1.4 


2.1 




4.8 


5.2 


5.0 


8.1 


Other 


25.5 


31.0 


35.9 


31.4 


TOTAL 


100.0 


100.0 


100.0 


100.0 



* Excluding India. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
244. 



357 



Nepal and Bhutan: Country Studies 



Table 17. Nepal: Imports by Commodity Group, Fiscal Years 1986-89 1 
(in millions of rupees) 2 



Commodity Group 


1986 


1987 


1988 


1989 3 




971.1 


1,028.9 


1,523.7 


1,291.1 




113.0 


144.0 


172.2 


203.7 


Crude materials and inedibles, 












393.0 


657.2 


1,306.9 


1,165.4 


\^irif*r5il tiipIq q nH liiHnpjiritQ 


1 054.0 


929.5 


1 049.9 


1 128.4 


Animal and vegetable oils and fats . . 


102.0 


175.9 


352.6 


345.6 




1,170.2 


1,287.6 


1,495.3 


1,541.4 


Manufactured goods classified 












2,759.5 


3,226.8 


3,359.2 


4,678.8 


Machinery and transportation 












2,134.7 


2,784.1 


4,143.7 


4,861.2 


Miscellaneous manufactured goods . . 


637.2 


664.0 


729.1 


1,020.2 


Other 


6.7 


7.3 


7.0 


4.7 


TOTAL 


9,341.4 


10,905.3 


14,139.6 


16,240.5 



1 Based on customs data. 

2 For value of the rupee — see Glossary. 

3 Provisional. 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
254. 



Table 18. Nepal: Disbursement of Foreign Loans and Grants, Selected 
Fiscal Years, 1984-90 
(in millions of rupees) * 



Source 1984 1985 1989 1990 



Bilateral 

Grants 765.5 756.9 1,363.8 1,674:0 

Loans 217.7 399.4 507.8 1,000.6 

Total bilateral 983.2 1,156.3 1,871.6 2,674.6 

Multilateral 

Grants 111.1 166.5 316.8 301.3 

Loans 1,453.2 1,353.6 5,158.6 4,959.0 

Total multilateral 1,564.3 1,520.1 5,475.4 5,260.3 



TOTAL 2,547.5 2,676.4 7,347.0 7,934.9 



* For value of the rupee — see Glossary. 



358 



Appendix 



Table 19. Nepal: Disbursement of Foreign Aid, Fiscal Years 1976-86 
(in millions of rupees) * 



Fiscal Year Committed Disbursed Difference 



1976 1,415.7 505.6 910.1 

1977 1,911.2 556.9 1,354.3 

1978 1,956.2 848.4 1,107.8 

1979 2,417.3 980.4 1,436.9 

1980 1,911.6 1,340.5 571.1 

1981 4,012.6 1,462.2 2,550.4 

1982 2,886.1 1,723.2 1,162.9 

1983 2,959.2 2,075.9 883.3 

1984 3,099.6 2,547.5 552.1 

1985 5,991.4 2,676.4 3,315.0 

1986 9,504.2 3,491.5 6,012.7 



• For value of the rupee — see Glossary. 

Source: Based on information from Babu Ram Shrestha, Managing External Assistance in Nepal, 
Kathmandu, 1990, 94, 116. 



Table 20. Nepal: Power and Irrigation Facilities, 1956-90 
(in hectares) 



Period Area 



First Plan (1956-61) 5,200 

Second Plan (1962-65) 1,035 

Third Plan (1965-70) 52,860 

Fourth Plan (1970-75) 37,733 

Fifth Plan (1975-80) 95,425 

Sixth Plan (1980-85) 172,649 

Seventh Plan (1985-90) 217,845 



TOTAL 582,747 



Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 
117. 



359 



Nepal and Bhutan: Country Studies 



Table 21. Nepal: Production of Principal Crops, Fiscal Years 1986-89 
(in thousands of tons) 



Crop 1986 1987 1988 1989 * 



Barley 23 25 * 24 27 

Corn 874 868 901 1,072 

Jute 61 23 15 18 

Millet 138 137 150 183 

Oilseeds . .. 79 83 94 99 

Potatoes 357 395 567 640 

Rice (paddy) 2,804 2,372 2,981 3,283 

Sugarcane 558 616 * 814 903 

Tobacco 5 5 4 5 

Wheat 598 701 744 830 



* Estimate. 

Source: Based on information from Nepal, National Planning Commission, Secretariat, 
Central Bureau of Statistics, Statistical Pocket Book: Nepal, 1990, Kathmandu, 1990, 40. 



Table 22. Bhutan: Climatic Statistics, Selected Stations, 1988 



Average Annual Temperature 2 



Station Precipitation 1 Minimum Maximum 



Chhukha 1,566 8.7 27.6 

Daga 1,282 7.5 25.3 

Damphu 1,818 6.5 23.4 

Gedu 3,498 4.2 23.7 

Samchi 4,290 16.3 32.0 

Shemgang : 1,743 6.4 20.1 

Thimphu 646 -3.8 25.6 

Tongsa 1,259 -0.1 21.7 

Wangdiphodrang 639 4.6 28.3 



1 In millimeters. 

2 In degrees Celsius. 

Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 28-33. 



360 



Appendix 



Table 23. Bhutan: Population by District, 1969 and 1980 



District 


1969 


1980 






n.a. 


Chhukha 




97,200 




80,357 


104,500 




46,316 


n.a. 


Daga 




27,700 


Dar 


16,908 


n.a. 




10,344 


n.a. 


Geylegphug 




112,800 


Ha 


21,356 


17,100 


Ja • • • • 


37,816 


n.a. 




45,651 


36,900 




121,252 


71,300 




21,212 


n.a. 






35,100 






34,500 




63,032 


39,800 




^7 Ifil 


1 Qnn 






72,200 




53,136 


43,300 




234,708 


170,000 




60,027 


64,600 






28,600 






47,700 




61,338 


n.a. 


TOTAL 


930,614 


1,142,200 * 



n.a. — not available. 

* A total of 1,165,000 was provided by Bhutan's Central Statistical Office 



Source: Based on information from Leo E. Rose, The Politics of Bhutan, Ithaca, 1977, 41; 
and Bhutan, Planning Commission, Central Statistical Office, Statistical Yearbook 
of Bhutan, 1989, Thimphu, May 1990, 2. 



361 



Nepal and Bhutan: Country Studies 



Table 24. Bhutan: Gross Domestic Product by Sector, 
Selected Years, 1981-91 1 
(in percentages) 



Sector 


1981 


1983 


1985 


1987 


1989 2 


1991 2 




. 25.9 


26.3 


24.7 


20.3 


20.5 


20.3 




. 12.3 


11.9 


11.7 


10.5 


10.3 


10.2 




14.7 


15.0 


16.2 


15.2 


15.0 


15.7 




— 


— 


— 


— 


— 


— 


Total agriculture, forestry, and 
















. 59.2 


53.2 


52.6 


46.0 


45.8 


46.2 




0.6 


0.6 


0.9 


1.0 


1.3 


1.5 




4.9 


5.5 


5.5 


5.8 


4.8 


5.2 




. 0.2 


0.4 


0.3 


10.7 


12.0 


10.7 




1 1 9 


i % a 

1.5. 


10 4. 


Q Q 


Q 


o n 


Commercial services 3 


12.2 


9.7 


8.6 


7.0 


7.5 


7.4 


Transportation, storage, and 
















4.5 


4.4 


4.4 


3.6 


4.0 


4.1 


Finance, insurance, real estate, 
















6.3 


5.7 


6.4 


6.0 


5.8 


5.9 


Community, social, and 
















9.5 


8.8 


11.1 


11.8 


11.5 


11.6 


(Less imputed bank service 
















. -2.3 


-1.9 


-2.2 


-1.8 


-1.6 


-1.6 


TOTAL 


. 100.0 


100.0 


100.0 


100.0 


100.0 


100.0 



— means negligible. 

1 Based on current prices. 

2 Projected. 

3 Wholesale and retail trade, hotels, and restaurants. 
♦ Includes government administration and defense. 

Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 82, 84. 



362 



Appendix 



Table 25. Bhutan: Value and Growth Rate of Gross Domestic 
Product, Selected Years, 1980-91 1 



Year Value 2 Growth Rate 3 



1980 1,095 n.a. 

1981 1,280 16.9 

1982 1,498 17.0 

1983 1,754 17.0 

1984 2,060 17.5 

1985 2,350 14.1 

1986 2,759 17.4 

1987 3,531 28.0 

1988 4 3,441 7.6 

1989 4 3,633 5.6 

1990 4 3,835 5.6 

1991 4 4,049 5.6 



n.a. — not available. 

1 Based on current prices. 

2 In millions of ngultrum; for value of the ngultrum — see Glossary. 

3 In percentages. 

4 Projected for Sixth Development Plan (1987-92). 

Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 82, 84. 



Table 26. Bhutan: Allocation and Sources of Funds under Development 

Plans, 1961-92 



Sources of Funds 2 

Development Plan Funds Allocated ' Domestic 3 India Other 4 



First (1961-66) 107 0.0 100.0 0.0 

Second (1966-71) 202 1.1 98.9 0.0 

Third (1971-76) 475 6.9 89.8 3.3 

Fourth (1976-81) 1,106 5.4 77.1 17.5 

Fifth (1981-87) 4,711 31.0 42.8 26.2 

Sixth (1987-92) 9,500 5 34.7 27.5 37.8 



n.a. — not available. 

1 In round millions of ngultrum; for value of the ngultrum — see Glossary. 

2 In percentages. 

3 Domestic revenues and internal loans. 

4 External grants and loans (includes financial gap). 

5 Proposed. 

Source: Based on information from World Bank, Bhutan: Development Planning in a Unique 
Environment, Washington, 1989, 26, 28, 33. 



363 



Nepal and Bhutan: Country Studies 



Table 27. Bhutan: Allocation of Funds under Development Plans by Sector 
or Business, 1961-92 
(in percentages) 



Sector or Business 


First 
(1962-66) 


Second 
(1966-71) 


Third 
(1971-76) 


Fourth 
(1976-81) 


Fifth 
(1981-87) 


Sixth 
(1987-92) 




1.8 


10.7 


12.3 


23.4 


9.0 


9.2 


Food Corporation of 














Bhutan 


0.0 


0.0 


0.0 


0.0 


2.9 


1.1 


Animal husbandry 


1.4 


2.9 


5.1 


5.6 


3.5 


3.5 


District administration . 


n.a. 


n.a. 


n.a. 


n.a. 


n.a. 


2.5 




0.0 


0.0 


0.0 


0.0 


0.0 


4.1 




8.8 


17.7 


18.9 


12.2 


11.2 


8.1 




3.0 


3.4 


6.0 


10.0 


4.9 


4.4 


General government . . . 


n.a. 


n.a. 


n.a. 


n.a. 


24.0 


20.6 


Geological survey 


0.0 


0.0 


0.0 


0.0 


0.0 


0.4 


Health 


2.9 


8.3 


8.0 


4.9 


5.1 


4.2 


Industry, mining, trade, 
















1.0 


0.5 


5.3 


15.8 


7.0 


13.3 


Information and 
















0. 1 


0.7 


0.8 


1 .0 


0.8 


1.0 


Posts and telegraphs . . . 


0.5 


2.9 


2.4 


1.5 


1.4 


0.7 


Power generation 1 


1.4 


4.5 


6.3 


4.6 


7.3 


13.1 




58.7 


34.9 


17.8 


11.6 


16.9 


9.3 


Road transportation 
















7.0 


5.9 


2.0 


0.0 


0.6 


0.5 


Telecommunications . . . 


0.0 


0.0 


3.1 


3.4 


0.7 


1.4 




0.0 


0.0 


3.0 


1.1 


0.6 


0.0 


Urban development . . . 


0.0 


0.0 


0.0 


0.0 


4.0 


2.6 


Other 


13.4 


7.7 


8.9 


4.9 


0.0 


0.0 


TOTAL 2 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 



n.a. — not available. 

1 Excluding the Chhukha Hydel Project. 

2 Figures may not add to total because of rounding. 



Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 79. 



364 



Appendix 



Table 28. Bhutan: Major Trade with India, Selected Years, 1981-87 
(in millions of ngultrum) * 



Commodity 


1981 


1983 


1985 


1987 


Exports 












35.7 


35.2 


55.0 


103.2 




16.0 


8.2 


46.8 


121.2 




10.8 


8.0 


38.0 


21.9 











2.0 




4.5 


11.0 


21.2 


2.6 




15.6 


5.1 


16.1 


23.2 




17.2 


3.6 


13.3 


19.7 




7.2 


8.1 


10.7 


6.0 




1.0 


4.4 


7.8 


17.5 










4.2 




0.3 


3.0 


6.9 


0.9 


Apples 


0.1 


0.5 


6.1 


8.9 


Methyl 


4.9 


0.3 


3.2 


1.9 


Blockboard 




0.1 


14.8 


29.3 











275.9 













13.2 


Other 


52.9 


69.7 


30.1 


31.1 




166.2 


157.2 


270.0 


702.4 


Imports 












. . . . 28.0 


40.4 


53.4 


45.1 


Gasoline 


11.7 


13.4 


16.2 


20.3 






n.a. 


n.a. 


8.7 


Rice 


15.6 


17.2 


33.5 


52.3 




4.8 


1.0 


33.5 


30.1 


Electricity . 


4 8 


15.8 


23.4 


14.2 




19.9 


4.4 


41.4 


23.4 


Iron rods 


28.8 


5.9 


21.7 


49.3 


Structures and parts 


. . . . 44.3 


3.3 


8.7 


8.7 


Machinery components .... 


14.6 


6.2 


49.6 


21.2 


Hardware 


2.0 


1.3 


21.1 


2.5 




2.0 


2.5 


4.1 


6.6 




, , 11.3 


5.2 


13.3 


2.5 




12.0 


1.3 


17.0 


16.4 


Other 


. ... 320.8 


482.7 


463.1 


598.4 




520.6 


600.6 


800.0 


899.7 


TRADE BALANCE 


-354.4 


-443.4 


-530.0 


-197.3 



— means no trade, 
n.a. — not available. 

* For value of the ngultrum — see Glossary. 

Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 62. 



365 



Nepal and Bhutan: Country Studies 



Table 29. Bhutan: Foreign Trade, Fiscal Years 1982-89 
(in millions of ngultrum) 1 



Year Exports 2 Imports 3 Trade Balance 



1982 159.4 646.5 -487.1 

1983 160.7 730.0 -569.3 

1984 206.4 825.2 -618.8 

1985 272.0 1,041.6 -769.6 

1986 427.1 1,205.4 -778.3 

1987 711.9 1,194.6 -482.7 

1988 1,072.6 1,817.0 -744.4 

1989 1,190.7 1,770.2 -579.5 



1 For value of the ngultrum — see Glossary. 

2 Free on board. 

3 Cost, insurance, and freight. 

Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 61; and International Mone- 
tary Fund, International Financial Statistics, Washington, January 1991, 124. 



Table 30. Bhutan: Balance of Payments, Selected Fiscal Years, 1982-88 
(in millions of ngultrum) 1 





1982 


1984 


1986 


1988 2 




159.4 


206.4 


427.1 


1,072.6 




-646.5 


-825.2 


-1,205.4 


-1,817.0 




-487.1 


-618.8 


-778.3 


-744.4 




131.3 


243.1 


314.7 


412.2 


Services and transfer payments .... 


-389.9 


-511.4 


-616.0 


-635.2 




-754.7 


-887.1 


-1,079.6 


-967.4 




788.7 


989.0 


1,268.8 


1,086.3 


Other loans 


n.a. 


n.a. 


6.3 


278.3 




25.9 


31.9 


-2.5 


-48.9 




59.9 


133.8 


193.0 


348.3 



n.a. — not available. 

1 For value of the ngultrum — see Glossary 

2 Estimate. 

3 Free on board. 

4 Cost, insurance, and freight. 



Source: Based on information from Bhutan, Planning Commission, Central Statistical Office, 
Statistical Yearbook of Bhutan, 1989, Thimphu, May 1990, 61. 



366 



Appendix 



Table 31. Bhutan: Diplomatic Relations with Other 
Nations, 1990 



Nation 1 Year 2 



Austria 1989 

Bangladesh 1973 

Denmark 1985 

Finland 1986 

India 1949 

Japan 1986 

Kuwait 1983 

Maldives 1984 

Nepal 1983 

Netherlands 1985 

Norway 1985 

Pakistan 1988 

South Korea 1987 

Sri Lanka 1987 

Sweden 1985 

Switzerland 1985 



1 In 1988 Bhutan also recognized the State of Palestine as proclaimed by the Palestine National Council 
in Algiers. 

2 Date relations were established. 



Table 32. Bhutan: Membership in Major International 
Organizations, 1990 



Organization Year 1 



Asian Development Bank 1982 

Asia-Pacific Postal Union 1983 

Colombo Plan for Cooperative Economic and Social Development in 

Asia and the Pacific 1962 

Coordination Bureau of Non-Aligned Countries 1973 

European Community 1985 2 

Food and Agriculture Organization 1981 

International Civil Aviation Organization 1989 

International Development Association 1981 

International Fund for Agricultural Development 1981 

International Monetary Fund 1981 

International Telecommunications Union 1988 

Group of 77 1982 

South Asia Co-operative Environmental Programme 1982 

South Asian Association for Regional Cooperation 1983 

United Nations 1971 

United Nations Economic and Social Commission for Asia and the Pacific . 1972 

United Nations Educational, Scientific, and Cultural Organization 1982 

Universal Postal Union 1969 

World Bank 1981 

World Health Organization 1982 



1 Date Bhutan became a member. 

2 Observer status. 



367 



Nepal and Bhutan: Country Studies 

Table 33. Bhutan: Ranks in the Royal Bhutan Army, 1991 

Bhutanese Rank * Translation 

Goongjey Field marshal 

Maksi goong General 

Goonglon Lieutenant 

Goonglon wogma Major general 

Dozin/Wangpon Brigadier 

Maksi gom Colonel 

Maksi worn Lieutenant colonel 

Lingpon Major 

Chipon Captain 

Deda gom Lieutenant 

Deda worn Second lieutenant 

Dimpon gom Warrant officer 

Dimpon worn Sergeant major 

Pelpon Sergeant 

Peljab Corporal 

Gopa Lance corporal 

Chyuma Private 

* Not all ranks have incumbents. Royal Bhutan Police ranks are the same as those used by the Royal 
Bhutan Army. 

Source: Based on information from Rigzin Dorji, Forms of Address in Bhutan, New Delhi, 
1976, 14. 



368 



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Thapar, O.D. (ed.). Seminar on Science, Technology, and Society. 
(Proceedings, February 25-27, 1986.) Thimphu: Directorate of 
Science and Technology, Royal Government of Bhutan, 1986. 

"The Disinherited: A Dossier on the Thirty-one Least Developed 
Countries," The UNESCO Courier [Paris], 34, October 1981, 
15-27. 

Thinley, Jigme. "The Role of the DYT," Druk Losel [Thimphu], 
4, No. 2, August 1982, 17-18. 

Tobgeyl, Kunzang, and Mani Dorji. 280 Folk Songs of Bhutan. Thim- 
phu: Department of Education, Royal Government of Bhutan, 
1985. 

Yearbook of International Organizations, 1990-91, 2: Countries. (Ed., 
Union of International Associations.) Munich: K.G. Sauer, 1990. 

United Nations. Department of International Economic and So- 
cial Affairs. Statistical Office. 1987 Statistical Yearbook. New York: 
1990. 



391 



Nepal and Bhutan: Country Studies 



Department of International Economic and Social Affairs. 

World Population at the Turn of the Century. (Population Studies, 
No. Ill, SESSER. A/111.) New York: 1989. 

Department of International Economic and Social Affairs. 

World Population Monitoring 1989: Special Report: The Population Sit- 
uation in the Least Developed Countries. (Population Studies, No. 
113, SESSER. A/113.) New York: 1990. 

United Nations Development Programme. Secretariat. Report on 
the Round Table Conference for Bhutan Held in Geneva, April 24, 1986. 
New York: June 1986. 

Bhutan- United Nations Development Programme (UNDP): A Pro- 
file of Technical Co-operation. Thimphu: Department of Informa- 
tion and Broadcasting, August 1985. 

Development Co-operation: Bhutan, 1988 Report. Thimphu: 

August 1989. 

. Development Co-operation: Bhutan, 1989 Report. Thimphu: 

September 1990. 

United States. Bureau of Mines. Division of International Miner- 
als. Mineral Industries of the Far East and South Asia. Washington, 
1988. 

Central Intelligence Agency. The World Fact Book, 1991. 

Washington: 1991. 

Central Intelligence Agency. Directorate of Intelligence. 

Reference Aid: Chiefs of State and Cabinet Members of Foreign Govern- 
ments. (LDA CS 91-002.) Washington: March- April 1991. 

Congress, 99th, 1st Session. Senate. Committee on For- 
eign Relations. South Asia and U.S. Interests. Washington: GPO, 
1985. 

. Congress, 100th, 2d Session. House of Representatives. 
Committee on Foreign Affairs. Subcommittee on Human Rights 
and International Organizations and Subcommittee on Asian 
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18, 1990.) Washington: GPO, 1991. 

. Department of the Interior. Division of Geography. Prelimi- 
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1952. 

Department of State. Bureau of Public Affairs. Background 

Notes: Bhutan. (Background Notes Series, No. 8334.) Washing- 
ton: November 1987. 

Department of State. Country Reports on Human Rights Prac- 
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Upadhyaya, G.S. "Social Change in Bhutan." DrukLosel [Thim- 
phu], 1, No. 2, August 1979, 26-27. 

Vas, E.A. The Dragon Kingdom: Journeys Through Bhutan. New Del- 
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Verma, Ravi. India's Role in the Emergence of Contemporary Bhutan. 
Delhi: Capital, 1988. 

Weintraub, Richard M. "Bhutan's King to Marry 4 Sisters," 
Washington Post, October 31, 1988, A14. 

World Bank. Bhutan: Development in a Himalayan Kingdom. (A World 
Bank Country Study.) Washington: 1984. 

Bhutan: Development Planning in a Unique Environment. (A 

World Bank Country Study.) Washington: 1989. 

World Radio TV Handbook, 1991, 45. (Ed., Andrew G. Sennitt.) 
Amsterdam: Billboard A.G., 1990. 

World Wildlife Fund. "Bhutan Fact Sheet." Washington: March 
1991, 2 pp. 

"Bhutan, WWF, UNDP Endowment Trust Fund for En- 
vironmental Conservation." March 6, 1991, 3 pp. 

Young, Lincoln J. "Agricultural Changes in Bhutan: Some En- 
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2, July 1991, 172-78. 

(Various issues of the following publications also were used in 
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[Thimphu], 1975-90.) 



393 



Glossary 



Asian Development Bank — Established in 1966, the Asian Develop- 
ment Bank assists developing member countries in economic 
development and promotes growth and cooperation. Member- 
ship includes both developed countries and developing coun- 
tries in Asia, and developed countries in the West. Nepal joined 
the bank in 1966, Bhutan in 1982. The bank is headquartered 
in Manila. 

birta — Nepalese tax-free land tenure granted by the government 
primarily as a pension or as a reward to political supporters 
and family members, important especially during the Rana 
period; abolished 1959. 

Colombo Plan for Cooperative, Economic, and Social Develop- 
ment in Asia and the Pacific (Colombo Plan) — Founded in 
1951 , originally under a slightly different name, to coordinate 
and aid development among newly independent countries. 
Members include nations throughout the Asia-Pacific region 
(Nepal joined in 1952; Bhutan, in 1962). Donor countries in- 
clude Australia, Britain, Canada, India, Japan, New Zealand, 
and the United States. The organization's headquarters are 
in Colombo, Sri Lanka. 

dzong — Bhutanese combined administrative and religious complex; 
a fortified monastery and often the seat of government for the 
local jurisdiction. 

fiscal year (FY) — In Nepal: July 16 to July 15. In Bhutan: July 
1 through June 30 after July 1, 1988. Prior to March 31, 1987, 
the fiscal year was from April 1 through March 3 1 . The peri- 
od from April 1 , 1987 to June 30, 1988 was used for FY 1988. 
The text of this book uses FY 1990, for example, when refer- 
ring to 1989-90. 

Gorkha — A principality west of Kathmandu and the ancestral home 
of the Shah kings, which became the House of Gorkha. 

gross domestic product (GDP) — A value measure of the flow of do- 
mestic goods and services produced by an economy over a period 
of time, such as a year. Only output values of goods for final 
consumption and investment are included because the values 
of primary and intermediate production are assumed to be 
included in final prices. GDP is sometimes aggregated and 
shown at market prices, meaning that indirect taxes and subsi- 
dies are included; when these have been eliminated, the result 
is GDP at factor cost. The word^ro^ indicates that deductions 



395 



Nepal and Bhutan: Country Studies 

for depreciation of physical assets have not been made. See also 
gross national product, 
gross national product (GNP) — Gross domestic product (q. v. ) plus 
the net income or loss stemming from transactions with for- 
eign countries. GNP is the broadest measure of the output of 
goods and services of an economy. It can be calculated at market 
prices, which include indirect taxes and subsidies. Because in- 
direct taxes and subsidies are only transfer payments, GNP 
is often calculated at factor cost by removing indirect taxes and 
subsidies. 

Gurkha — The British derivative of Gorkha evolved from the name 
Gorkha (q.v.), which originally was applied to the soldiers of 
that region. The Gurkha soldiers of Nepal, who became fa- 
mous for their service in the British and Indian armies in the 
nineteenth and twentieth centuries, principally were composed 
of members of the Magar, Gurung, Limbu, and Rai tribes, 
and were not a single ethnic group, tribe, clan, or caste. 

International Monetary Fund (IMF) — Established along with the 
World Bank (q.v.) in 1945, the IMF is a specialized agency 
affiliated with the United Nations and is responsible for stabiliz- 
ing international exchange loans to its members (including in- 
dustrialized and developing countries) when they experience 
balance of payments difficulties. These loans frequently carry 
conditions that require substantial international economic ad- 
justments by the recipients, most of which are developing 
countries. 

jagir — A type of land tenure in Nepal granted primarily to mili- 
tary personnel, allowing them tax-free access to produce from 
the land in return for military service. This tenure was a basic 
feature of military service in northern India and in Nepal dur- 
ing late medieval times, and disappeared in Nepal only in the 
twentieth century. 

Khasa — A term applied to the peoples and languages in the western 
parts of Nepal, closely related to the cultures of northern India. 

Kirata — A Tibeto-Burman ethnic group inhabiting eastern Nepal 
since before the Licchavi Dynasty, just prior to and during the 
early years of the Christian era. 

ngultrum — Bhutan's unit of currency adopted in 1974. In Novem- 
ber 1990, the official exchange rate was US$1 equals ngultrum 
(Nu) 17.95 and at par with the Indian rupee (Nul = Rsl). 
There are 100 chetrum (Ch) in one ngultrum. There are 5, 
10, 25, and 50 chetrum cupro-nickel coins and a 1 ngultrum 
bronze coin, and 1, 2, 5, 10, 20, 50, and 100 ngultrum notes. 
Large ngultrum amounts are counted using the Sanskrit terms 



396 



Glossary 



lakh (100,000) and crore (10 million); thus Nul lakh = Nu 
100,000 and Nu 1 crore = NulO million). The term is de- 
rived from the Dzongkha ngul, meaning silver, and trum, prob- 
ably a Hindi word, meaning money. Before 1957 Indian and 
Bhutanese coins circulated in nondecimal paisa and rupee 
denominations (1 rupee = 64 paisa); after the decimal system 
was adopted in 1957, paisa, rupee, and sertum circulated 
(1 sertum = 100 rupees; 1 rupee = 100 paisa). 
nibbana — More commonly known in Western literature as nirvana. 
The goal of the path, the extinction of desire, hate, and the 
illusion of selfhood. A state of mystical union with the abso- 
lute one world soul {brahman), not an individual soul that at- 
tains it (as in Hinduism). For the Hindu, a state of liberation 
or illumination. For the Buddhist, there are no immortal par- 
ticular souls, only the world soul, in which all beings, both ani- 
mate and inanimate, are participants. The goal of spiritual 
practice in all branches of Buddhism. Enlightenment is the reali- 
zation of the identity of the self with the absolute. The release 
from the cycle of rebirths and the annihilation of the individu- 
al being that occurs on achievement of perfect spiritual under- 
standing. 

official development assistance (ODA) — Those flows to develop- 
ing countries and multilateral institutions provided by official 
agencies, including state and local governments, or by their 
executive agencies, each transaction of which meets the follow- 
ing criteria: it is administered with the promotion of the eco- 
nomic development and welfare of developing countries as its 
main objective; and it is concessional in character and contains 
a grant element of at least 25 percent. 

panchayat — In ancient times, a Nepalese public assembly, ideally 
comprised of the five (pancha) most important caste or occupa- 
tional groups in the village. A pancha is a member of a pan- 
chayat. From 1962 until the 1990 constitution took effect, 
assemblies modeled on this ancient system formed the back- 
bone of political structure in Nepal, at the village and district 
levels, and at the top in the National Panchayat, or Rashtriya 
Panchayat. 

Rana — Term, used as an honorific personal name, signified 
strength in battle in late medieval north India. It was adopted 
as a title by Jang Bahadur Kunwar in the 1850s, and by his 
heirs after him, and became the standard name used for this 
Nepalese dynasty of prime ministers and their families. 

rupee — (Rs) or Nepalese rupee (NRs), the unit of currency, univer- 
sal since the late 1960s. The Nepalese rupee is linked to the 



397 



Nepal and Bhutan: Country Studies 

Indian rupee and is fully convertible although restrictions were 
imposed during the 1989-90 trade and transit dispute. The 
equivalency rate used in Chapter 1 is Rs2.1 = US$1 in 1919. 
By 1973 the official exchange rate was Rs6.55 = US$1; in 1991, 
Rs30.80 = US$l. One Nepalese rupee = 100 paisa. 

samuha — Interest group within a pancha (q. v.). The term is deroga- 
tory when used by someone who does not belong to a pancha. 

soft loan — A loan bearing either no rate of interest, or an interest 
rate below the true cost of the capital lent. The International 
Development Association, an affiliate of the International Bank 
for Reconstruction (see World Bank, q.v.), grants soft loans 
to developing countries for long-term capital projects. 

South Asian Association for Regional Cooperation (SAARC) — 
Comprises the seven nations of South Asia: Bangladesh, Bhu- 
tan, India, Maldives, Nepal, Pakistan, and Sri Lanka; head- 
quartered in Kathmandu. Founded as South Asia Regional 
Cooperation (SARC) organization at a meeting for foreign 
ministers in New Delhi on August 1-2, 1983; a second organiza- 
tional meeting of foreign ministers was held in Thimphu in 
May 1985; inaugural meeting of heads of state and govern- 
ment in Dhaka on December 7-8, 1986. The goal is to effect 
economic, technical, and cultural cooperation, and to provide 
a forum for discussions of South Asia's political problems. 

United States Export-Import Bank (Eximbank) — An independent 
corporate agency of the United States government, founded 
in 1934 to stimulate foreign trade during the Great Depres- 
sion. The Eximbank facilitates export financing of United States 
goods and services by neutralizing the effect of export credit 
subsidies from other governments and by absorbing reasona- 
ble credit risks beyond the reach of the private sector. 

World Bank — Informal name used to designate a group of four 
affiliated international institutions: the International Bank for 
Reconstruction and Development (IBRD), the International 
Development Association (IDA), the International Finance Cor- 
poration (IFC), and the Multilateral Investment Guarantee 
Agency (MIGA). The IBRD, established in 1945, has as its 
primary purpose the provision of loans to developing countries 
for productive projects. The IDA, a legally separate loan fund 
but administered by the staff of the IBRD, was set up in 1960 
to furnish credits to the poorest developing countries on much 
easier terms than those of conventional IBRD loans. The IFC, 
founded in 1956, supplements the activities of the IBRD through 
loans and assistance designed specifically to encourage the 
growth of productive private enterprises in the less-developed 



398 



Glossary 



countries. The MIGA, founded in 1988, insures private for- 
eign investment in developing countries against various non- 
commercial risks. The president and certain senior officers of 
the IBRD hold the same positions in the IFC . The four insti- 
tutions are owned by the governments of the countries that sub- 
scribe their capital. To participate in the World Bank group, 
member states must first belong to the Intentional Monetary 
Fund (IMF — q.v.). 



399 



Index 



Abadhi language, 81 
Abhira Guptas, 8 
Abhira people, 4 

Abuse of Authority Investigating Com- 
mission, 159 
acquired immune deficiency syndrome 
(AIDS) 

Bhutan: 289 
Nepal: 219 
Adhikari, Man Mohan, 170 
Advising Assembly, 147-48 
Afghan people, 21 
Afghan War, Second, 201 
Agricultural Development Bank (see also 

Co-operative Bank), 114, 132 
Agricultural Inputs Corporation, 140 
Agricultural Reorganization Act, 125 
agriculture 

Bhutan: 274, 275, 297, 298-301, 
334; employment in, 280, 298, 
306; as percentage of gross do- 
mestic product, 289, 298; women 
in, 280 

Nepal: xxiii, 51, 59-60, 108, 112, 
116, 122-24, 126; employment 
in, 66; under five-year plans, 
109, 110, 122; foreign aid for, 
119, 120, 121, 188; in the Hill 
Region, 59; income from, 42; 
influence of climate on, 62; migra- 
tion for, 70; as percentage of 
gross domestic product, 122; social 
strata in, 87 

AIDS. See acquired immune deficiency 
syndrome 

Ain Sangraha, 229 

Akhil Bharatiya Nepali Rashtriya Con- 
gress. See All-India Nepali National 
Congress 

All-Bhutan Examinations, 285 

All-India Nepali National Congress, 37 

All Peasants Union, 168 

All Round National Education Commit- 
tee, 94 

Amnesty International, xxvi, xxvii, 
326 

Amo Chhu, 271 
Amritsar massacre, 202-3 



Amsuvarman, 8 
Anapurna I, xv 

Anglo-Nepalese War (1814-16), xv, 

22-23, 185, 200, 236 
Anglo-Tibetan Convention (1904), 261 
Arimalla, 10 

army. See Gorkha; Gurkha soldiers; Royal 

Bhutan Army; Royal Nepal Army 
Army Training Centre, 337 
Army Welfare Committee, 338 
Army Welfare Project, 338 
Arniko Highway, 135, 186, 212, 236 
Arunachal Pradesh, 266 
Arun River, 65, 132 
Arya people, 4-5 
Ashoka, 5 

Asian- African Conference, 191 

Asian-African Legal Consultative Com- 
mittee, 191 

Asian Development Bank: aid to Bhutan 
by, 287, 295, 296; aid to Nepal by, 
xxiii, 114, 119, 120, 126, 132, 133; 
Bhutan's debt to, 297; Bhutan's 
membership in, 334; Nepal's member- 
ship in, xx, xxiv; reaction of, to pro- 
democracy movement, 146 

Asian Regional Team for Employment 
Production, 122 

Asia Watch, 189 

Assam, 266 

Assamese language, 274 
Assembly of Lords, 20, 33, 146 
Associations and Organizations (Control) 

Act (1963) (Nepal), 166 
Australia: aid to Bhutan by, 295; aid to 

Nepal by, 119; Bhutanese students in, 

287 

Austria: aid to Bhutan by, 296 
Ayur-Veda, 101 



Back-to-the- Village National Campaign 

(BVNC), 162-63 
Baghmati River, 55 
Bahadur, Namgyal, 264 
Bahadur, Sher, 19 



401 



Nepal and Bhutan: Country Studies 



Baisi confederation, 14 
Balaju: industry in, 127 
balance of payments, 118-19 
balance of trade 
Bhutan: 297 
Nepal: 140 
Bangladesh: aid from Bhutan to, 296; 
Bhutan's trade and relations with, 266, 
297, 331, 333; military training of 
Nepalese in, 221; Nepal's relations 
with, 183-84 
banking 

Bhutan: 294-95 
Nepal: 114-15 
Bank of Bhutan, 294, 295, 300 
barley 

Bhutan: 298 
Nepal: 62, 124 
barter, 293 

Basic Needs Program, 112-13 
Basnyat Conspiracy, 28 
Basnyat family, 20 

Bhadgaon, 8; Gorkha conquest of, 18; 
origins of, 11; population of, 68; in 
Three Kingdoms period, 13, 15 

Bhaktapur. See Bhadgaon 

Bhandari, Madan, 169-70, 173 

Bharadari Sabha. See Assembly of Lords 

Bhasa Pathsalas schools, 33 

Bhattarai, Krishna Prasad (K.P.), 170, 
175; as prime minister, 145, 152, 165 

Bheri River, 65 

Bhojpuri language, 81 

Bhote or Bhotia people, 76, 79, 90, 273 

Bhutan, ancient: capitals of, 257; early set- 
dement of, 254-56; etymology of, 254; 
government, 255; origins of, 253-54; re- 
gions of, 257; Tibetan invasion of, 256 

Bhutan, modern: China's claim to, 332; 
as "Eastern Geneva," 334; Nepalese 
minority in, 333; Nepalese political agi- 
tation in, 238; trade with Nepal, 297 

Bhutan: Human Rights Violations 
Against the Nepali-Speaking Population 
in the South, xxvi 

Bhutan Aid Group-Nepal, 327 

Bhutan Board Projects, 303 

Bhutan Broadcasting Service, 312, 328 

Bhutan Carbide and Chemicals, 303 

Bhutan Chamber of Commerce and In- 
dustry, 305-6, 318 

Bhutan Development Finance Corpora- 
tion, 294-95, 296 



Bhutanese people, xxii, 273, 274 
Bhutan Government Transport Service, 
307 

Bhutan People's Forum for Human 

Rights, 327 
Bhutan People's Party, 326, 327 
Bhutan State Congress party, 324 
Bhutan Students Union, 327 
Bhutan Tourism Corporation, 312 
Bhutan-Nepal Friendship Association, 

333 

Bhutan-Nepal relations, 184, 333 
Binyogi, Govinda, 177 
Biratnagar Jute Mills, 127 
Birendra, Bir Bikram Shah Dev (king). 

See Shah Dev, Birendra Bir Bikram 
Birendra Hospital, 232 
birta, 23, 43 

Bishop, Barry, 57, 60, 80 

Black Mountains, 269 

bodhisattvas, 282 

Bodhnath, 9 

Bon religion, 254, 284 

Border Roads Organization, 336 

Boxer Uprising (1900), 201 

Brahma, 91 

Brahman caste, 80; in elite class, 88; hill, 
20, 77; Indo-Nepalese, 75; Thakuri, 76 
Brahmaputra River, 271 
bridges, 307 

Britain: aid to Bhutan by, 296; aid to 
Nepal by, 119, 133; annual payments 
by, to Nepal, 36; Bhutanese students 
in, 287; Bhutan's status under, 263; ex- 
ports to, 116-18; influence of, on Bhu- 
tan, 323; Jang Bahadur's visit to, 28; 
military training for Nepal in, 216, 221 ; 
Nepal's military clashes with, 19; as 
protector of Bhutan, 335; support of, 
for Jang Bahadur, 32; support of, for 
zone of peace initiative, 189; volunteer 
programs of, 296 

Britain-Bhutan relations, xxiv; boundary 
disputes and, 259; military, 335; tribu- 
tary, 259 

Britain-Nepal relations, 29, 189; arms 
supplies, 215; military, 220 

British Army: recruitment of Gurkhas 
into, 200, 203 

British Brigade of Gurkhas (see also 
Gurkha soldiers), xviii, 79, 176, 179, 
189, 197, 198, 200, 223, 225; future of, 
224; number of soldiers in, 201, 224; 



402 



Index 



postings of, 224; recruitment into, 202, 
205 

British Broadcasting Corporation, 179 
British East India Company, 15, 17; 

Cooch Behar as dependency of, 259; 

military aggression by, 17, 200, 259; 

Nepal's relations and agreements with, 

xv, 20, 21-22; Sepoy Rebellion against, 

31 

British Raj, 179 

British resident, 23, 25 

Brunei: Gurkha soldiers in, xviii, 198, 225 

buckwheat, 298 

Buddha {see also Siddhartha Gautama), 5, 
92, 282 

Buddhism, xix, 5, 76, 88, 91-92, 277, 

281- 84; as Bhutan's national religion, 
281, 324; concepts of, 92; Eightfold 
Path of, 92; establishment of, in Bhu- 
tan, xxi, 254-55, 273; establishment of, 
in Nepal, 5; Four Noble Truths of, 92; 
and Hinduism, 88; intersect rivalry in, 
255; monastic system of, 262; schism 
in, 10; scriptures of, 282; symbols of, 
283; tantrism in, 283; theology of, 

282- 83 

Buddhism, Mahayana, xxi, 281-84; 
Drukpa subsect, 255, 283; Gelugpa 
(Yellow Hat) sect, 255, 256; Kargyupa 
sect, 255-56, 282, 283; Nyingmapa 
(Red Hat) sect, 255, 256; percentage 
of Bhutanese population practicing, 281 

Buddhist convents, 283 

Buddhist monasteries, 283; government 
control of, 263; role of, 10 

Buddhist monks, 255; compulsory inves- 
titure, 258; hierarchy of, 282; lifestyle 
of, 283; number of, in Bhutan, 282; 
role of, 10 

Buddhist nuns, 283, 314 

Buddhists, 152; geographical distribution 
of, 90 

Buddhist shrines and temples 

Bhutan: 254, 282-83 

Nepal: 9, 10, 11 
budget 

Bhutan: 292-93 

Nepal: 113 
Budhi River, 65 

Bumthang, 255; Buddhist temples at, 254 
Bumthang Chhu, 271 
Bumthangkha language, 276 
Butawal, 69; industry in, 127 



BVNC. See Back-to-the- Village National 
Campaign 



Cabral, John, 15 

Cacella, Stephen, 15 

Canada: aid to and volunteers in Bhutan 

by, 296 
Capuchin mission, 15 
CARE, 188 

caste system, 79-81, 83-84, 149, 277; and 
Hinduism, 90; and police attitudes, 
226; women in, xix, 86 
censorship, 176, 177 
census 

Bhutan: xxvii, 272 
Nepal: 65 
Central Bank of India, 115 
Central Bureau of Statistics, 66 
Central Monastic Body, 282, 318 
Central Police Headquarters, 227 
Chabahil, 9 
Chalukyas, 9-10 

Chand, Lokendra Bahadur, 50, 172 
Chartered Bank of India, 294 
Chaubisi confederation, 14 
Chautaria, Fateh Jang, 26 
Chhetri caste, 76, 77, 79, 80, 88; as 

Gurkha soldiers, 199, 200 
chhokey, 275-76 

Chhukha Hydel Project, 297-98, 304 
China: aid to Nepal by, 119, 126, 133, 
146, 187; arms supplies to Nepal from, 
187, 215, 234-35, 236; border issues of, 
179, 335; clashes with Nepal, 19; in- 
vasion of Tibet by, 14, 21, 185, 233, 
262; Koirala's visit to, 43; Mahendra's 
visit to, 236; relations of, with Three 
Kingdoms, 14; territorial claims of, 
332; threat from, 212, 335 
China-Bhutan relations, 332-33, 335 
China-Nepal relations, xx, xxi, 43, 180, 

184-87, 220, 221, 235, 236 
China Today, 178 

Chinese People's Liberation Army, 332 

Chomo Lhari, 269 

chorten. See stupas 

Choutariya family, 20 

Christianity, 88 

Christians, 152 

Chumbi Valley, 269, 332, 335 
Churia Range. See Siwalik Range 



403 



Nepal and Bhutan: Country Studies 



Citizenship Act (1952) (Nepal), 180 
Citizenship Act (1985) (Bhutan), xxii, 
xxvii, 325 

Citizen's Rights Committee. See Nagrik 

Adhikar Samiti 
civil aviation 

Bhutan: 308 

Nepal: 136 
civil rights, 153 
civil service 

Bhutan: 321-22 

Nepal: 159; expanded under King 
Mahendra, 88 
civil war, 258-59 
class and society 

Bhutan: 276-78 

Nepal: 87-88; elite, 87, 88, 97, 163, 
329; middle, 87; under panchayat 
system, 162; peasant, 84, 87; un- 
der Rana rule, 33 

climate 

Bhutan: 270-71, 298, 334 
Nepal: 60-62 
climatic zones, 61 
Coca-Cola Corporation, 188 
cocaine, 82 
colleges 

Bhutan: 287 
Nepal: 96-97 
Colombo Plan for Cooperative, Econom- 
ic, and Social Development in Asia and 
the Pacific: aid to Bhutan by, 295; aid 
to Nepal by, xxiii, 119; Bhutan's mem- 
bership in, 265, 334 
Commoner, 178 
communications 

Bhutan: 308, 311-12, 334 
Nepal: 109-10, 112, 119, 137-38 
Communist Party of Nepal, 41, 168-69; 
coalition of, with Nepali Congress 
Party, xvi; factions in, 163, 168; oppo- 
sition of, to Koirala government, 44; 
opposition of, to monarchy, 163 
Communist Party of Nepal (Manandhar), 
170 

Communist Party of Nepal (Marxist), 168 

Communist Party of Nepal (United 
Marxist-Leninist), xxv, xxvi, 168, 
169-70, 325; in 1991 election, xvii, 174, 
238; in 1992 election, xviii; opposition 
of, to Tanakpur project, xx 

communists, xxvi, 174, 238-39 

Companies Act (1989), 290 



Congress Socialist Party, 37 
Constitutional Council, 158, 159 
Constitutional Reform Committee, 147 
constitution of 1948, 38, 147 
constitution of 1951, 41, 147-48 
constitution of 1959, 43, 148-49 
constitution of 1962, xvi, 149-50, 171; 
court system under, 230; elections un- 
der, 49; judiciary under, 230 
constitution of 1990, xvii, xix, 145, 146, 
152-59, 166, 177; army under, xviii, 
198, 205-8 
Constitution of the National Assembly 

(1953), xxi, 315, 319 
Constitution Recommendation Commis- 
sion, xxvii, 77, 145, 152 
Constitution Reforms Commission, 49, 
150 

Convention Against Torture and Other 
Cruel, Inhuman, or Degrading Treat- 
ment, 228 

Cooch Behar, 256, 258-59, 260 

Co-operative Bank {see also Agricultural 
Development Bank), 114 

corn 

Bhutan: 298, 299 
Nepal: 124 
corruption: in government, 50, 164, 172; 

investigation of, 159 
Council of Ministers (Bhutan), xxi, 318, 
319-21 

Council of Ministers (Nepal), xvii, 49, 77, 

147, 148, 149, 154-55 
Council of State, 148 
coup d'etat of 1960, 4, 82, 145, 164, 166, 

239 

coups d'etat, attempted: of 1949, 38; of 

1950, 38 
courts martial, 225 
court system 

Bhutan: 340, 341 

Nepal: 157-59, 229-31 
criminal justice system 

Bhutan: 341-42 

Nepal: 153-54 
currency 

Bhutan: 293-94 

Nepal: 42, 115; convertibility of, 
108, 115, 116; decoupled from 
Indian rupee, 182 



Daily News, 178 



404 



Index 



Dakpa, Jigme: as shabdrung, 258 

Dakshinakoligrama, 8 

Dalai Lama, 256, 259 

Damai caste, 84 

dams, 65, 132 

Dang Valley, 60 

Daraudi River, 65 

Dashain festival, 62 

debt, foreign 

Bhutan: 296-97 

Nepal: 118, 121, 140 
debt service: as percentage of gross do- 
mestic product, 121; ratio, 118 
defense industry, 22 
defense spending, 209, 211 
deforestation 

Bhutan: 301 

Nepal: 60, 122, 125-26, 129 

democracy movement (see also Movement 
for the Restoration of Democracy), in 
Bhutan, xxii, 253, 339 

Democratic Front, 237 

Deopatan: shrines at, 9 

Department of Animal Husbandry Fish- 
ery Development Programme (Bhu- 
tan), 300 

Department of Civil Aviation and Trans- 
port (Bhutan), 308 

Department of Education (Bhutan), 276, 
285-86, 287 

Department of Forestry (Bhutan), 300, 
301, 339 

Department of Mines and Geology 

(Nepal), 128 
Department of Public Health (Bhutan), 

287, 289 

Department of Public Works (Bhutan), 
307 

Department of the Adjutant General 

(Nepal), 218 
Department of the Judge Advocate 

General (Nepal), 225 
Department of Trade and Commerce 

(Bhutan), 305 
Devaladevi (queen), 12 
development 

Bhutan: aid for, 266; infrastructure, 

330; projects, 264 
Nepal: consultant firms, 88; econom- 
ic, 50, 67, 118, 120, 154; under 
First Five- Year Plan, 109; foreign 
aid for, 110, 120; under Mahendra, 
47; and panchayat system, 110; proj- 



ects, 119; rural, 112; social, 154 
Development Plan, First (1961-66), 290, 
301, 306 

Development Plan, Second (1966-71), 
290 

Development Plan, Third (1971-76), 

290- 91 

Development Plan, Fourth (1976-81), 291 
Development Plan, Fifth (1981-86), 291, 

300, 302, 307 
Development Plan, Sixth (1986-91), 

291- 92, 296, 300, 305, 307, 325 
Development Plan, Seventh, (1991-96), 

291 

development plans (Bhutan): funding for, 

290, 291, 292 
Development Secretariat, 290 
Dewangiri, 263 

Dhangadhi-Dadeldhura Highway, 135 

Dharan, 127 

dharma, 5, 257, 283 

dharma chastras, 30 

Dhimal people, 74 

diet 

Bhutan: 277-78, 288, 289 
Nepal: 123 
Dipawali. See Tihar festival 
diseases, 98-100, 288; among military 

personnel, 219, 232 
divorce, 278-79 
Donga Range, 269 
Dorji, Jigme Palden, 264, 265, 324 
Dorji, Kesang (Ashi), 265, 314 
Dorji, Lam, 336, 340 
Dorji, Lhendup, 264, 265 
Dorji family, 262, 264 
Doya people, 274 
Drangme Chhu, 269, 271 
dress, traditional, 278 
driglam namzha, xxii, xxiv, xxvii, 276, 

324-25, 340; ethnic Nepalese protest 

against, 325; justification of, 327 
Drokpa tribe, 274 
drought, 62 
drug subculture, 82 
Druk-Air. See Royal Bhutan Airlines 
Druk Gyalpo (Dragon King), xxi, xxvii, 

xxviii, 262, 315, 319, 321, 327, 336; 

votes of confidence in, 265, 314 
Drukyul, xxi, 254, 256 
Dual Foreign Exchange rate, 116 
Duars, 271; annexed by Britain, 260; 

Bhutanese control of, 259; Monyul 



405 



Nepal and Bhutan: Country Studies 



invasion of, 254 

Duars Plain, 269-70 

Duar War, 260 

Dudh River, 65 

Durbar High School, 93 

Dyer, R.E.H., 202-3 

dzong, 255, 256, 315 

Dzongkha language, xxii, xxviii, 276; 
broadcasts in, 312, 328; as language of 
instruction, 286; as national language, 
264, 324, 325; publications in, 328 



earthquake of 1803, 21 
East-West Highway. See Mahendra 
Highway 

Economic Council for Asia and the Far 
East, 191 

economy. See individual development plans and 

five-year plans 
education (see also schools) 

Bhutan: xxiii; under development 
plans, 285, 290-91; enrollments 
in, 286; foreign, 287; higher, 287; 
Western-style, 284 
Nepal: xix, 92-98, 112, 140; enroll- 
ments in, 94, 96, 97; foreign aid 
for, 119, 120, 188; higher, 96-97; 
languages for, xxii; as percentage 
of government expenditures, 42; 
primary, 94, 112; right to, 153; 
secondary, 94; under Second Five- 
YearPlan, 109; for women, 86-87 
elections of 1959, 43, 164 
elections of 1963, 46-47 
elections of 1981, 49, 167, 171-72 
elections of 1986, 50, 172-73 
elections of 1987, 173 
elections of 1991, xvii, 145, 164, 166, 

173-76; military role in, 214, 220 
elections of 1992, xviii 
electricity 

Bhutan: 304-5; as percentage of 
gross domestic product, 289, 304 
Nepal: xxvi, 42, 112, 127, 129-32 
elite class 

Bhutan: 329 
Nepal: 87, 88 
Emirates Bank International Limited, 115 
employment 

Bhutan: 306 
Nepal: 42, 56, 66 
energy 



Bhutan: 304-5 
Nepal: 125, 129-33 
English language, 276; broadcasts and 
publications in, 178, 179, 312, 328; as 
language of instruction, 286; in mili- 
tary, 217 
environment, 292 

ethnic groups (see also under individual 
groups), xix; in Bhutan, xxii, 273-75; 
conflict among, xxvi, 325; desire for 
recognition by, xvii; geographic distri- 
bution of, 74, 76; migration of, 77; in 
Nepal, xvii, 74-79 

European Community, 334 

European trade 
Bhutan: 297 
Nepal: 118 

Eximbank. See Export-Import Bank 

Export Entitlement Program, 116 

Export-Import Bank, 121 

exports 

Bhutan: 297 

Nepal: 115, 116; agricultural, 116, 
122; to Britain, 116; earnings 
from, 119; to Europe, 118; growth 
in, 112, 119; to imports ratio, 140; 
to India, 116; industrial, 127; to 
United States, 116 



family 

Bhutan: 277, 279 
Nepal: 65, 83, 86, 87 
family planning, 66, 72-74; foreign aid 

for, 188 
famine, 62 

farmers, 77; tenant, 124 

Federal Republic of Germany (West Ger- 
many): aid to Bhutan by, 296; aid to 
Nepal by, 121, 132, 190; arms supplies 
to Nepal from, 215; Bhutanese students 
in, 287; military training of Nepalese 
in, 221; tourists to Bhutan from, 313 

fertilization, 300-301 

festivals, 281 

feudalism 

Bhutan: 264 
Nepal: 81, 124 

fisheries, 300 

Five-YearPlan, First (1956-61), 43, 108, 
109, 113 



406 



Index 



Five- Year Plan, Second (1962-65), 43, 
109 

Five-Year Plan, Third (1965-70), 47, 
109-10 

Five- Year Plan, Fourth (1970-75), 47, 

94, 109, 110 
Five- Year Plan, Fifth (1975-80), 110, 

122, 133 

Five- Year Plan, Sixth (1980-85), 110, 136 
Five-Year Plan, Seventh (1985-90), 110, 
133 

flooding, 62, 272 
food 

Bhutan: fish as, 300; production, 298 
Nepal: crisis of 1983, 50; production, 

112, 122, 123; shortages, xix, xxvi, 

100 

Food Corporation of Bhutan, 295 

foreign affairs 

Bhutan: xxiv, 265, 266, 328-34 
Nepal: xx, 154, 179-90; national 
security in, 208, 211 

foreign assistance 

Bhutan: xxiii, 292, 293, 295-96; for 

education, 287 
Nepal: xix-xx, 56, 109, 110, 113, 
119-21, 146, 164, 188; for agricul- 
ture, 119, 120, 121, 188; for edu- 
cation, 119, 120, 188; for family 
planning, 188; for five-year plans, 
109; grants for, 120; for hydro- 
electric production, 119, 120, 190; 
for industry, 119, 126, 189; for 
infrastructure, 119, 120, 133, 188; 
for irrigation, 119, 120; loans as 
percentage of, 120; loans for, 120; 
multilateral, 120; as percentage of 
development, 110; as percentage 
of gross domestic product, 120; 
as percentage of gross national 
product, 121; program aid, 120, 
121; project aid, 120; for public 
health, 119, 120, 188, 189, 190; 
for road construction, 133; for 
rural areas, 188; sources of, 120; 
technical, 120-21; for transporta- 
tion, 119, 189 

Foreign Department, 36 

foreigners, illegal, 306 

foreign exchange 

Bhutan: earnings, 311, 312, 328 
Nepal: Gurkha remittances as source 
of, xviii, 176, 223; rates, 115, 



116; reserves, 115; spent on petro- 
leum, 132; tourism as source of, 
xxiii, 138, 139 

Forest Guards, 301, 339-40 

Forest Products Development Board, 125 

Forestry School, 301 

forests 

Bhutan: 269, 270, 290, 301-2 
Nepal: 125-26, 129; rain in, 61; in 
Tarai, 60 

Forum for the Protection of Human 
Rights, 176 

France: aid to Nepal by, 190; arms sup- 
plies to Nepal from, 215; diplomatic re- 
lations with Nepal, 43 

Freedom Front of the Limbu People, 
170 

Freedom of Speech Publications Act 

(1988), 176-77 
Front of the Kirat Aborigines, 170 
Fuelwood Corporation, 125 

Gandak River. See Narayani River 
Gandhi, Indira, 48 
Gandhi, Mohandas K., 36, 37, 40 
Gandhi, Rajiv, 235 
Ganges River, 65 
Gangetic Plain, 5, 57, 60 
Garhwal kingdom: attack on, 21 
GDP. See gross domestic product 
Gedu Wood Manufacturing Corporation, 
303 

Generalized System of Preferences, 297 
geographic location 

Bhutan: 253, 330, 335-36 
Nepal: 56, 107, 203; effect of, on 
trade and transit, 179; strategic 
importance of, 146, 211, 231 
geography 

Bhutan: 266-72; land area, 268-69; 

land use, 269; topography, 266-70 
Nepal: 56-60, 61, 76; defense con- 
straints of, 212, 231-32; Hill 
Region, 57, 59-60; Mountain 
Region, 57-59; Tarai Region, 57, 
60 

Geological Survey of Bhutan, 303 
Geological Survey of India, 303 
Geylegphug, 270 
Ghising, Subhas, 238 
gho, 278 
glaciers, 271-72 



407 



Nepal and Bhutan: Country Studies 



GNP. See gross national product 
gongzim, 262 
Gopal people, 4 

Gorkha {see also Gurkha soldiers), xv, 
3,15-18, 19, 20, 21, 22, 23, 25, 31, 199 
Gorkha Congress of Calcutta, 37 
Gorkhali, 36, 37 

Gorkha-Narayangadh Highway, 135 

Gorkha National Liberation Front, 238 

Gorkha Parishad, 44 

Gorkhapatra (Gorkha Newsletter), 33, 178 

Gorkha Samsar (Gorkha World), 36 

government 

Bhutan: 315-23; employment in, 
306; executive branch, 319-21; 
legislature, 315-19; local, xxii, 
322-23; as percentage of gross 
domestic product, 289; theocratic, 
256-61 

Nepal: civil service, 159; expendi- 
tures, 42; health care provided 
by, 101; interim, xvii, 145, 161, 
165-66; in 1950s, 42-43; revenue 
sources, 113 
Government Employees' Provident Fund, 
295 

Government of Nepal Constitution Act 
(1948), 147 

Great Himalayan Range, 269, 271 

Grindlays Bank, 115 

gross domestic product (GDP) 

Bhutan: agriculture as percentage of, 
289, 298; construction as percent- 
age of, 289; effect of political 
violence on, 328; electricity pro- 
duction as percentage of, 289; 
forest industry as percentage of, 
301; government services as per- 
centage of, 289; industry as per- 
centage of, 303; manufacturing as 
percentage of, 289; mining as per- 
centage of, 303; in 1977, 291; in 
1988, 289; value of, 291 
Nepal: agriculture as percentage of, 
122; foreign aid as percentage of, 
120; growth, 112; industrial sector 
as percentage of, 127 

gross national product (GNP) 
Bhutan: 289 

Nepal: defense budget as percentage 
of, 209; foreign aid as percentage 
of, 121; tax burden as percentage 
of, 114 



Group of 77 

Bhutan: 334 

Nepal: xx, 191 
guestworkers 

Bhutan: from Nepal, 306 

Nepal: countries employed in, 190; 
remittances from, 190 
Gupta emperors, 6 

Gurkha regiments: Assam Rifles, 201; 
Burma Military Police, 201 ; Burma Ri- 
fles, 201; designations of, 201; Indian 
Armed Police, 201; Purano Gorakh, 
199; restrictions on, 204; Sri Nath, 199 

Gurkha soldiers (see also Gorkha), xviii, 
197, 198-99; advantages of foreign ser- 
vice by, 223-24; ethnic distribution of, 
79, 199; remittances from, xviii, 176, 
189, 223; service by, in foreign armed 
forces, xviii, 79, 176, 179, 189, 223-25; 
service by, in foreign conflicts, 201, 
202, 203-4; as teachers, 93 

Gurung people, 76, 79; religions of, 90; 
as Gurkha soldiers, 199, 200 

Gyetsha Mini-Hydel, 305 



Hadigaon, 9 

hashish, 82 

Ha Valley, 271 

health, public 

Bhutan: 287-89, 334 
Nepal: 34; foreign aid for, 120, 188, 
189, 190; maternal and child, 73; 
survey, 100 

health care 

Bhutan: under development plans, 
290; facilities, 288; immuniza- 
tions, 288; personnel, 288 
Nepal: xix, 98, 100-102, 112; 
Ayurvedic, 100, 101; facilities, 
100-102; folk, 100-101; foreign 
aid for, 119, 121; for the men- 
tally ill, 228; military, 232; 
modern, 100, 101; as percentage 
of government expenditures, 42; 
personnel, 101, 102; practices, 
100; providing, 112, 113; for 
women, 86 

Helvetas (Swiss Association for Techni- 
cal Assistance), 296 

heroin, 82 

Hetauda, 69; industry in, 127 
High Court, 321 



408 



Index 



Hillary, Sir Edmond, 138 

Hill Region, 57, 59-60, 66, 69; agricul- 
ture in, 123; elite class in, 163; food 
shortage in, 59, 100; migration from, 
59, 70; migration to, 59; underemploy- 
ment in, 122; unemployment in, 122 

Himalayas, xv, 57, 269; and defense 
strategy, 212; role of, in precipitation, 
61 

Hindi, 76, 274, 276; publications in, 178 
Hinduism, 10, 76, 90-91, 284; and Bud- 
dhism, 88; as official religion, xix, 88, 
152, 190 

Hindus: geographical distribution of, 90 
Hindustan Times, 178 
hippies, 82 
Hodgson, Brian, 25 
hotels, 138 

House of Representatives, 43, 148, 157; 

women in, 174 
housing 

Bhutan: 280-81, 289 

Nepal: 112 
human rights 

Bhutan : xxvii ,325 

Nepal: 146, 164, 227 
Hutton, Michael, xxvii, xxviii 
hydroelectric production 

Bhutan: 304-5 

Nepal: 129, 132; foreign aid for, 1 19, 
120, 190; river system as source 
for, 65; Tanakpur project, xx 

IMF. See International Monetary Fund 
immigrants, illegal, xxii, xxvi 
imports 

Bhutan: 297, 298 

Nepal: auction system for, 118; of 
consumer goods, 116; control of, 
115; earnings from, 119; to ex- 
ports ratio, 140; increase in, 118, 
119; from India, 116; of petro- 
leum, 132 

IMTRAT. See Indian Military Training 
Team 

income: from agriculture, 42; distribu- 
tion, 140; per capita, 107, 209; taxes, 
113, 114 

Index on Censorship, xxvii 

India: aid to Bhutan by, 265, 290, 291, 
292, 295, 304, 330; aid to Royal Bhu- 
tan Army by, 335, 337; border issues, 



179; Bhutanese students in, 287; Bhu- 
tan's debt to, 297; ideas imported into 
Bhutan from, 324; influence on Nepal 
of, 6; migration from, 59; Nepalese op- 
position to, 233; Nepalese political agi- 
tation in, 238, 327; as protector of 
Bhutan, 335; reaction of, to Nepal's 
zone of peace initiative, 182; reaction 
of, to prodemocracy movement, 146, 
182-83; trade agreement with Bhutan, 
331; trade with Bhutan, 297 

India-Bhutan relations, xxiv, 330-31; an- 
nual subsidy, 263; border issues in, 
331; influences on, 330; military, 335 

India-Nepal relations, xx, 180-83, 185, 
232-36; arms supplies from, 215; fi- 
nancial aid from, 119, 133, 146, 181; 
military, 180, 220, 232-36; military 
training in, 216, 221; Nepalese demon- 
strations against, 51; during Sino- 
Indian border war, 44; and trade and 
transit treaty, 43, 51, 115, 139, 235; 
technical assistance from, 133; threat 
by, 212; trade with, 107, 116, 118 

Indian Air Force, 338 

Indian Army: cooperation of, with Roy- 
al Nepal Army, 233-34; Gurkha sol- 
diers in, xviii, 79, 176, 197, 198, 203, 
205, 224, 338 

Indian Border Roads Organization, 207 

Indian College of Combat, 338 

Indian Military Academy, 337, 338, 339 

Indian Military Liaison Group, 220 

Indian Military Mission, 220, 233 

Indian Military Training and Advisory 
Group, 220 

Indian Military Training Team (IM- 
TRAT), 335, 337 

Indian National Congress, 36-37; Nepa- 
lese collaboration with, 37 

Indian National Defence Academy, 337 

Indian Police Academy, 340 

Indian School Certificate Council, 285 

Indo- Aryan people, 79 

Indo-Nepalese people, xix, 74-76, 77 

Indo-Pakistani War, 181, 331 

Indo-Soviet Treaty of Peace, Friendship, 
and Cooperation (1971), 181 

Indo-Sri Lankan Peace Agreement 
(1987), 184 

Indrawati River, 65 

Industrial Enterprises Act (1974), 128 

Industrial Policy of Nepal, 121 



409 



Nepal and Bhutan: Country Studies 



industry 

Bhutan: 303 

Nepal: 66, 109, 110, 119, 126-29, 
189 

inflation: in 1980s, 51 
Inner Himalayas, 269 
Integrated Fisheries Development Proj- 
ect, 300 

Intelsat. See International Telecommuni- 
cations Satellite Organization 

Interim Government of Nepal Act (1951), 
147 

interned security 

Bhutan: xxviii, 325-26, 336, 339- 
40 

Nepal: 213-14, 237-39; as mission of 
Royal Nepal Army, 197-98 
International Civil Aviation Organiza- 
tion, 191 

International Committee of the Red 
Cross, xxviii, 191 

International Covenant on Civil and Po- 
litical Rights, 228 

International Development Association, 
120 

International Human Rights Commis- 
sion, 326 

International Labour Organisation, 287, 
306 

International Lumbini Development 

Project, 190 
International Military Education Train- 
ing (IMET) program, 221 
International Monetary Fund (IMF) 
Bhutan: 334 
Nepal: 119, 191 
International Telecommunications Satel- 
lite Organization (Intelsat), 311 
irrigation 

Bhutan: 300 

Nepal: 112, 122, 123; under First 
Five- Year Plan, 109; foreign aid 
for, 119, 120; under Second Five- 
Year Plan, 109; sources for, 62, 
65; Tanakpur project, xx 
Islam, 284 



Jackson, Michael, 55 
jagir, 23, 201 

Jaldhaka hydroelectric plant, 304 
Janadoot, 178 



Janakpur Railway, 135 
Janata (The People), 36 
Janata Dal, 165 
Jan Morcha, 238 

Japan: aid to Bhutan by, 295, 296; aid 
to Nepal by, 119, 121, 132, 146; 
Bhutanese students in, 287; imports 
from, 118; reaction of, to prodemocracy 
movement, 146; tourists to Bhutan 
from, 313; volunteer programs, 296 

identification cards, 328 

IMET. See International Military Educa- 
tion Training 

Jayajyotirmalla (king), 12 

Jayaprakasa of Kathmandu (king), 18 

Jayasthitimalla, 12 

Je Khenpo, 257, 258, 282, 315 

Jesuit missionaries, 256 

jhankri, 100, 101 

Joshi, Bhuwan Lai, 74, 75 

jotishi, 101 

Judicial Council, 158; duties of, 230; es- 
tablished, 230; members of, 230 
Judicial Service Commission, 158-59 
judicial system 

Bhutan: xxi, 264, 321, 341 

Nepal: 157-59, 228-31 



kaji, 28 

Kali Gandaki Valley, 57 
Kali River, 65 
Kami caste, 83 

Kanjur (Collection of the Words of the 

Buddha), 282 
Kantavati, 19 
Karnali River, 60, 65, 132 
Kathmandu, 8, 59, 69; elite class in, 163; 

Gorkha conquest of, 17-18; origins of, 

11; population of, 68; rainfall in, 61; 

in Three Kingdoms period, 13, 15; 

united with Patan, 13 
Kathmandu Valley, 55, 59; ethnic groups 

in, 76; urban population in, 69 
Kharbandi Technical School, 287 
Khasa kings, 11 
Khasa people, 5 

Khas bhasha (Khasa language), 13 
Khoprn, 8 

Khoprn grama. See Khoprn 
Khulekhani I, 132 
Khulekhani II, 132 
Khulekhani III, 132 



410 



Index 



king of Nepal {see also individual shahs): and 
armed forces, xvi, xviii; under Bud- 
dhism, 5-6; under constitution, 43, 
148, 154-55; judges appointed by, 158; 
and Nepali Congress Party, 48; oppo- 
sition to, 163; powers of, 148, 149, 155, 
207-8; under Rana rule, 30; restora- 
tion of, xvi, 40; role of, 13; as supreme 
mili-tary commander, 155, 198, 205-6, 
208 

King's Council. See Raj Parishad 
kinship network, 83 
kira, 278 

Kirata people, 4, 6 

Kirtipur, 17 

Kodari Highway, 135 

Kohalpur-Surkhet Highway, 135 

Koirala, Bishweshawar Prasad (B.P.), 
37-38, 172; coup against, 4, 82, 145; 
death of, 50, 167; exiled, 44, 166; im- 
prisoned, 37, 44, 48, 166; and king, 
43-44; released from prison, 47, 48; 
speech by, to United Nations, 43; visit 
of, to China, 43 

Koirala, Girija Prasad (G.P.), xviii, xxiv, 
167; and military, 206; as minister of 
defense, 208; as prime minister, 168, 
176, 228; and Tanakpur project, xx 

Koirala, Matrika Prasad (M.P.), 41 

Koligrama, 8 

Koli people, 9 

Kosi River, 60, 62, 65, 119, 132 
Kot Massacre (1846), 26-27, 146 
Krishna, 91 

Kshatriya, Indo-Nepalese, 75 
Kuensel, 328 

Kulekhani hydroelectric projects, 132 
Kulha Gangri, 269 
Kumaon, 21 

Kunwar, Bala Narasimha, 28 

Kunwar, Jagat Jang, 30 

Kunwar (Rana), Jang Bahadur, xv, 26, 
200; administration under, 27-32, 34, 
146; education under, 93; legal code 
under, 29-30, 228-29 

Kurichu, 305 

Kuwait: financial aid from, 132, 190; 

guestworkers in, 190; loans from, 119 
Kyichu, 254 



labor and work force 

Bhutan: 289, 303, 306, 322 



Nepal: 121-22, 127 
labor unions 

Bhutan: 306 

Nepal: 37, 121, 122 
Lakshmidevi (queen), 26 
Lalitpur. See Patan 
land 

Bhutan: arable, 298; availability of, 
289 

Nepal: division of holdings, 83; in- 
dividual ownership of, 79, 140; 
shortage of, 67; social importance 
of, 84; tax on, 113-14 
Land and Cultivation Record Compila- 
tion Act (1956), 124 
landholdings, 279 
landlords, 23, 124 
land reform 

Bhutan: 264 

Nepal: 47, 124-25 
Land Reform Act (1964) (Nepal), 125 
Land Reform Savings Corporation, 114 
Land Revenue Office, 34 
Lands Act (1957), 124 
landslides, 62 
language 

Bhutan: xxviii, 275-76 

Nepal: 81 
Lapchekha Agriculture Farm, 338 
Law Book Management Board, 229 
legal code 

Bhutan: 257, 341 

Nepal: 12, 29, 228-29 
legislature, 155-57 
Lepcha people, 274 
Levi, Sylvain, 7 

Lhasa: Bhutanese petition to, 259; Brit- 
ish mission to, 261; Chinese in, 332; 
Nepal's disputes with, 20 

Lhengye Tshokdu. See State Council 

Lhomon, xxi, 254 

Lhomon Khashi, 254 

Lhomon Tsendenjong, 254 

Lhotsam language, 276 

Liberation Army, 39 

Lichavi Dynasty, 6-9 

Likhu Khola River, 65 

Limbu people, 77; as Gurkha soldiers, 
199, 200; religions of, 90 

Limbu wan Mukli Morcha. See Freedom 
Front of the Limbu People 

literacy 

Bhutan: xxiii, 286, 328 



411 



Nepal and Bhutan: Country Studies 



Nepal: 140, 178; for men, xix, 94, 
97; in military, 219; in rural areas, 
97; in urban areas, 97; for women, 
xix, 86, 87, 94, 97 
livestock 

Bhutan: 289, 299-300, 334 
Nepal: 59, 60, 77 
loans 

Bhutan: domestic, 294-95 
Nepal: 56, 119; from Kuwait, 119; 
from Saudi Arabia, 119 



Madi River, 65 

Magar people, 15, 76-77; as Gurkha sol- 
diers, 199, 200; religions of, 90 

Mahabharat Lekh, 59 

Maha Kali River, 65 

Maha Sabha. See Upper House 

Mahendra, Bir Bikram Shah Dev (king). 
See Shah Dev, Mahendra Bir Bikram 

Mahendra Highway, 47, 119, 133, 135, 
212 

Maithili language, 13, 81 
malaria, 47 

Maldives: aid from Bhutan to, 296; 

Nepal's relations with, 184 
Malla Dynasty, 3, 10-12 
Manadeva I, 6 

Manandhar, Bishnu Bahadur, 170 

Manas Chhu, 271 

Manesvari, 12 

Mangde Chhu, 271 

manufacturing, 289 

Maratha people, 21 

marijuana, 82 

marriage 

Bhutan: 278-79, 325 

Nepal: arranged, 101; intercaste, 
80; interethnic, 275; migration 
for, 71 
Marsyandi River, 65 
Masai party, 173 
Matribhumi, 1 78 
Mauryan Empire, 5-6 
media 

Bhutan: 328 

Nepal: 176-79 
Middle East, 297 

migrants: Indian, 75; Indo-Aryan, 79; 

Tibetan, 79 
migration 

Bhutan: 70; regulation of, 327-28 



Nepal: 67-72, 84; of ethnic groups, 
77; from Hill Region, 59, 69; 
from India, 59, 69; to India, 70; 
lifetime regional, 70-71; perma- 
nent, 69-70; seasonal, 59, 60, 69- 
70, 71-72; to the Tarai, 47; from 
Tibet, 59, 69 
military justice, 225-26 
military officers, 159; disciplinary pow- 
ers of, 225 
millet 

Bhutan: 124 
Nepal: 298 
minerals and mining 
Bhutan: 303 
Nepal: 128-29 
Ministry of Communications (Bhutan), 
308, 319, 328; Department of Informa- 
tion, 328; Department of Posts, 308; 
Department of Telecommunications, 
308, 311 
Ministry of Defence (India), 336 
Ministry of Defence (Nepal), 206, 208 
Ministry of Education (Nepal), 94-96 
Ministry of Finance (Bhutan), 294, 319 
Ministry of Finance (Nepal), 114 
Ministry of Foreign Affairs (Bhutan), 319 
Ministry of Home Affairs (Bhutan), 328 
Ministry of Home Affairs (Nepal), 227, 
228 

Ministry of Labor and Social Services 

(Nepal), 121 
Ministry of Local Development (Nepal), 

161 

Ministry of Social Services (Bhutan), 319 
Ministry of Trade, Industry, and Tour- 
ism (Bhutan), 312, 319 
missionaries, 15, 18 
Mithila, 9 
Mo Chhu, 269, 271 
modernization 

Bhutan: 273 

Nepal: 48-51 
monarchy, 313-15; established, xxi, 

261-62, 313; forms of, 253 
money 

Bhutan: 293-94 

Nepal: 115-16 
monsoons 

Bhutan: 270, 271 

Nepal: 61-62 
Monyul, xxi, 254; invasion of Duars, 254 
Morrison Knudsen Corporation, 188 



412 



Index 



Mountain Region, 57-59; food short- 
age in, 59, 100; migration from, 70; 
percentage of population living in, 66, 
69; population growth in, 66 

Mount Everest, xv, 57, 76 

Movement for the Restoration of De- 
mocracy, 152; activities of, xvi, 145; at- 
tempts to suppress, 146; communists 
in, 169; elite class in, 163; goals of, xvii, 
160; inspiration for, xxvi, 164, 165; in- 
ternational reaction to, 146, 182-83, 
188, 190; military's role in, 197, 213, 
220, 239; police role in, 228; press sup- 
port for, 177; ramifications of, 164 

Mughal Dynasty, 13-14 

Mukti Sena. See Liberation Army 

Mul Chok, 12 

Mullick Commission, 165 

Muluki Ain (1854), 29-30, 47, 228-29 

Muslims, 152 



Nagrik Adhikar Samiti, 36 
Namgyal, Ngawang, 256, 257-58 
Narayani River, 43, 60, 62, 65, 132, 176 
narcotics, 82 
Nation, xxvii 

National Assembly, xxi, xxv, xxviii, 263, 
265, 315-19; Buddhist representation 
in, 282; established, 263, 314 
National Awakening Week, 51 
National Board of Secondary Education, 
286 

National Commercial Bank. See Rastriya 
Banijya Bank 

National Commission for Trade and In- 
dustry, 295 

National Council, 157 

National Day, 314 

National Defence Council, 155, 206-7, 
209 

National Democratic Party (Chand), 171, 
174 

National Democratic Party (Thapa), 171 , 
174 

National Democratic Unity Panchayat 
Party, 171 

National Education Advisory Board, 94 

National Education Plan, 96 

National Education Planning Commis- 
sion, 94 

National Election Observation Com- 



mittee, 176 
National Independent Student Council, 
162 

National Institute of Family Health, 289 
National Insurance Corporation. See Ras- 
triya Beema Sansthan 
National Mongol Organization, 170 
National Panchayat. See Rashtriya Pan- 
chayat 

National People's Liberation Front, 170 
National Planning Commission, 109, 122 
national security 

Bhutan: 335-41 

Nepal: 207, 208, 211-14, 231-39 
National Security Act (1992), xxv 
National Warm Water Fish Culture 

Centre, 300 
National Women's Association of Bhu- 
tan, 280 

Natural Resources Training Institute, 296 
Negi, Sharad Singh, 61 
Nehru, Jawaharlal, 36, 233, 330 
Nepal, ancient, 4-9, 256; Buddhism in, 

5; early influences on, 4-6 
Nepal, medieval, 9-15 
Nepal, modern: China's claim to, 332; 
territories annexed by, 21-22; trade 
with Bhutan, 297 
Nepal Act Series, 229 
Nepal Aid Group, 120 
Nepal Arab Bank, 114-15 
Nepal Bank Limited, 114 
Nepal-Bhutan Friendship and Cultural 

Society, 333 
Nepal Civil Service Act (1956), 159 
Nepal Companies Act (1936), 127, 128 
Nepal Democratic Congress (see also 

Nepali Congress Party), 38, 39 
Nepal Electricity Authority, xxvi 
Nepalese in Bhutan, xxii, 184, 273, 275; 
arrested, 327; deported, 327; interna- 
tional reaction to, 326-27; as percen- 
tage of population, 253, 275; political 
activities of, 339; protest against driglam 
namzha by, 325 
Nepalese Police Force, 159, 198, 213, 

226-28, 237 
Nepalese Society. See Nepali Sangh 
Nepal Ex-servicemen's Organization, 150 
Nepal Family Planning and Maternal 

Child Health Board, 72-73 
Nepal Family Planning Association, 72 
Nepal Food Corporation, 140 



413 



Nepal and Bhutan: Country Studies 



Nepalganj, 127 

Nepal Government Railway, 135-36 

Nepal Grindlays Bank, 115 

Nepali Congress Party, 39, 164, 166-68, 
326; alliances of, with other parties, xvi, 
44; convention of, 164-65; economic 
program of, 167; elites in, 163; in ex- 
ile, 145, 166; factions in, 163, 167; for- 
eign policy of, 167; government under, 
198; and military, 205; in 1959 elec- 
tion, 166; in 1981 election, 167, 171; 
in 1986 election, 172; in 1991 election, 
xvii, 174, 238; in 1992 election, xviii; 
opposition of, to monarchy, 163; polit- 
ical protests organized by, 44, 167, 172, 
213; reaction of, to National Pan- 
chayat, 46; reconciliation of, with 
monarchy, 48; schism in, 47 

Nepali language: in Bhutan, xxii, xxviii, 
276, 286, 325; broadcasts in, 179, 
312, 328; in Gurkha regiments, 217; 
history of, 13; as language of in- 
struction, xxii, 93, 286; as national 
language, 76, 81, 152; publications in, 
178, 328 

Nepali National Congress (see also Nepa- 
li Congress Party), 37, 38, 39, 42, 148 

Nepal Indosuez Bank, 115 

Nepal Industrial Board, 34 

Nepal Industrial Development Corpora- 
tion, 114, 120 

Nepal Investment Forum, xxvi 

Nepali Rashtriya Congress. See Nepali 
National Congress 

Nepali Sangh, 37 

Nepal Janahit Party. See Nepal Welfare 
Party 

Nepal Journalists Association, 177 

Nepal Kanoon Patriki, 229 

Nepal Kirat Adhibasi Janajiti Morcha. See 

Front of the Kirat Aborigines 
Nepal Nationalist Gorkha Parishad, 170 
Nepal Panchayat Council, 171 
Nepal Panchayat Parishad. See Nepal 

Panchayat Council 
Nepal Plywood and Bobbin Company, 34 
Nepal Police Act (1955), 226 
Nepal Prajatantrik Congress. See Nepal 

Democratic Congress 
Nepal Press Digest, 77 
Nepal Raj Patra, 113, 159, 229 
Nepal Rashtrabadi Gorkha Parishad. See 

Nepal Nationalist Gorkha Parishad 



Nepal Rashtriya Jana Mukti Morcha. See 

National People's Liberation Front 
Nepal Rastra Bank, 115 
Nepal Sadbhavana Party, 170, 174 
Nepal Standard Industrial Classification 

(1986-87), 127 
Nepal Tarai Association, 170 
Nepal Tarai Muslim Congress Party, 170 
Nepal Tarai Unity Forum, 170 
Nepal Television Corporation, 138, 178 
Nepal Trade Union Congress, 168 
Nepal Welfare Party, 171 
Nepal Workers' Organization, 150 
Nepal Youth Organization, 150 
Neupane, S.K., 326 
New Approach to Primary Education, 
287 

Newari era, 9 

Newari language, 9, 12, 13, 81; publica- 
tions in, 178 

Newari people, 9, 20, 76, 77; caste sys- 
tem of, 80; languages of, 81; occupa- 
tions of, 77-79; religions of, 90; 
women's status among, 86 

New Education System, 94 

newspapers, 36, 177-78 

Newsweek, 178 

New Zealand: aid to Bhutan by, 296; aid 
to Nepal by, 119; Bhutanese students 
in, 287; volunteer programs, 296 

Ngalopkha language, 276 

Ngalop people, xxii 

Nonaligned Movement, 152; Bhutan's 
membership in, 329, 334; Nepal's 
membership in, xx, xxiv, 234; Nepal's 
zone of peace announcement to, 179; 
summits of, 179, 191, 331 

nonalignment policy, 180, 190-91 

Ochterlony, David, 21, 22 

Office of Accounts, 33 

OPEC . See Organization of the Petrole- 
um Exporting Countries 

Open General License, 118 

Organization and Control Act (1963), 122 

Organization of the Petroleum Exporting 
Countries (OPEC): assistance from, 
xxiii-xxiv, 121 

Padmasambhava (see also Rimpoche): 
arrival in Bhutan, 254-55 



414 



Index 



Pahar. See Hill Region 

Pahari people, 76, 77, 79; caste system 
of, 80; in elite class, 88; languages of, 
81; women's status among, 86 

Pakistan: military training of Nepalese in, 
221; Nepal's relations with, 43, 183-84, 
220; Nepal's trade and transit agree- 
ment with, 183-84 

Pamirs, 58 

Panchayat Constitution. See constitution 
of 1962 

panchayat system, xvi, 44-48, 82, 145, 147, 
149, 159-61, 161-66; and develop- 
ment, 110; ended, xvii, 145, 152; 
opposition to, xvi, 48, 49, 165; pro- 
fessional organizations under, 162; 
referendum on, 48, 49, 150, 171; 
under Third Five- Year Plan, 109 

Panchen Lama, 20, 259 

Pande, Damodar, 19 

Pande, Rana Jang, 25 

Pande family, 20, 25; in Kot Massacre, 
27 

Parbat. See Mountain Region 
Parbate people, 76 

Parishad. See Nepal Nationalist Gorkha 
Parishad 

Parliament (see also Rashtriya Panchayat), 

xxvi, 148, 155; powers of, 208 
parma, 84 
Paro airport, 308 
Paro Valley, 271 
Pashupatinath, 10, 18 
pastoralism, 59 
pastoralists, 77 
Pataliputra, 6 

Patan: ancient, 8-9; Gorkha conquest of, 
1; industry in, 127; medieval, 12; ori- 
gins of, 11; population of, 68; in Three 
Kingdoms period, 13, 15; united with 
Kathmandu, 13 

patron-client relationship: between 
monarch and armed forces, xvi, 82; 
breakdown in, 56 

Peace Corps, 188 

peasants, 84, 87 

Pemadechen (dowager queen): lifestyle of, 
314 

penal code, 342 

Penden Cement Authority, 303 
People's Council. See Praja Parishad 
People's Front. See Jan Morcha 
People's Party. See Janata Dal 



petroleum, 132, 133 
Phajo Drugom Shigpo, 255 
Pharping Hydroelectric Company, 34 
Pho Chhu, 271 

Phuntsholing, 270; as municipal corpo- 
ration, 323; population of, 273 
Planning Commission, 290, 337 
Pokhara, 69; industry in, 127 
Pokhara Valley, 61 

police. See Nepalese Police Force; Royal 
Bhutan Police Police Day, 340 

Police Executive Development Course, 
340 

Police Training Centre, 340 
political demonstrations, xvi, xxii-xxiii, 
47-48, 145, 172; casualties in, 214; 
against India, 51; military's role in, 
213-14; of prodemocracy movement, 
xvii-xviii, 145, 165, 167, 214; suppres- 
sion of, 165 
political parties, 163, 166-71; banned, 
xvi, 44, 145, 149, 150, 161, 166; in 
1991 election, xvii; formed, xvi; growth 
of, 36-38; legalized, xvii, 145, 165; in 
prodemocracy movement, 146; rights 
of, 154; underground operation of, 
161-62 
political violence 
Bhutan: 325-27 
Nepal: xvii, 172, 175, 237-38 
Polyani, Karl, 56 
population 

Bhutan: 334; age distribution in, 
272; density, 273; Nepalese as 
percentage of, xxii, 253; in 1969, 
272; in 1980, 272; in 1988, 272; 
in 1990, xxi, 272; percentage of, 
involved in agriculture, 298, 305; 
percentage of, practicing Bud- 
dhism, 282; of Phuntsholing, 
273; projected, 272; of Thimphu, 
273; urban, 273 
Nepal: density, 59, 67; distribution 
of, 66; ethnic distribution in, 81; 
in Hill Region, 66; in Mountain 
Region, 66; in 1930s, 34; in 1981, 
65; in 1990, xix, xxi; percentage 
of, in poverty, 209; in 2001, 66; 
in Tarai Region, 66 
population statistics 

Bhutan: birth rate, 272; death rate, 
272, 288; fertility rate, 272; 
growth rate, 272; life expectancy, 



415 



Nepal and Bhutan: Country Studies 



273; mortality rate, 272; sex 
ratio, 272 
Nepal: birth rate, 66, 67; death 
rate, 66, 67; dependence ratio, 
66; fertility rate, 66-67; growth 
rate, 66, 67, 70, 112, 140; infant 
mortality rate, 42, 67, 98, 112-13; 
life expectancy, 42, 65, 98, 112; 
mortality rate, 66-67; sex ratio, 66 
Portuguese missionaries, 256 
postage stamps, 311 
postal service 

Bhutan: 308, 311 
Nepal: 42, 137 
poverty, 56, 98; under Fifth Five- Year 
Plan, 110; population living in, 209; 
rural, 84 
Pradhan, Sahana, 170 
Praja Parishad, 36; revitalized, 41 
Pratinidhi Sabha. See House of Represen- 
tatives 
precipitation 

Bhutan: 270, 271 
Nepal: 61, 63 
prime minister: under constitution, 43; 

hereditary succession to, 30 
prisoners of conscience, xxvii 
prisons, xxvii, 228 
Prithvi Highway, 135 
private sector, 289-90 
prodemocracy movement. See Movement 

for the Restoration of Democracy 
professional organizations: under pan- 

chayat system, 162 
public enterprises, 140 
Public Security Act, 177 
Public Service Commission, 159 
Punakha, 257 
Puna Tsang Chhu, 271 
punishment: capital, 153; caste distinc- 
tions in, 30; corporal, 29 

Qing Empire, 179; tribute to, 21, 31 

radio 

Bhutan: 312 

Nepal: 138, 178-79 
Raigye Chhu, 271 
railroads, 42, 135-36, 212 
rainfall 

Bhutan: 301 



Nepal: 61 

Rai people, 76, 77; as Gurkha soldiers, 

199, 200; religions of, 90 
Rajendralakshmi (queen), 18, 28 
Raj Parishad, 155 
Rajputana, 15 
rajya, 43 

Ramamalla (king), 12 
Rana, Gadul Shumsher Jang Bahadur, 
206 

Rana, Jang Bahadur Kunwar. See Kun- 
war (Rana), Jang Bahadur 

Rana, Nir Shumsher Jang Bahadur, 206 

Rana, Ram Krishna, 18 

Rana Dynasty, xv, 3, 26-41; and Gur- 
khas, 197, 204 

Ranajit of Bhadgaon (king), 17, 18 

Rana oligarchy, 32-36, 146-47; econo- 
my under, 108; external opposition to, 
37; overthrown, 81, 147 

Rapti River, 65 

Rapti Valley, 60 

Rashtriya Mongol Sanghatan. See 
National Mongol Organization 

Rashtriya Panchayat, 46, 149-50, 160; 
dissolved, xvii, 165; elections to, 46, 49, 
150; factions in, 50; membership of, 48, 
171; military under, 205-6; terms in, 
150; women in, 173 

Rashtriya Prajatantrik Ekata Panchayat 
Party. See National Democratic Unity 
Panchayat Party 

Rashtriya Sabha. See National Council 

Rashtriya Sambad Samity, 176 

Rashtriya Swatantra Vidyarthi Parishad. 
See National Independent Student 
Council 

Rastra Pukar, 178 

Rastriya Beema Sansthan, 115 

Rastriya Banijya Bank, 114, 115 

Ratnamalla (king), 12 

Rayamalla (king), 12 

Reagan, Ronald, 188 

referendum of 1980, 48, 49, 150-52, 171 

Reform Commission, 48 

refugees: camps, xxiv-xxv; problems, 
xxiv, xxv, xxvi, xxvii, 238, 275; from 
Tibet, 329, 332 

Regional Center for Peace and Disarma- 
ment in South Asia, 191 

Regmi, Dilli Raman, 7 

religion 

Bhutan: 281-84 



416 



Index 



Nepal: (see also under individual sects), 
xix, 88-92; freedom of, 152 
remittances: foreign exchange from, xviii, 

176, 223; from guestworkers, 190; from 

Gurkha soldiers, xviii, 176, 223 
Reserve Bank of India, 294 
revolution of 1950, 38-41, 147; education 

as catalyst for, 93; role of military in, 

205 
rice 

Bhutan: 270, 274, 298, 299 

Nepal: 123-24 
Rimpoche (guru) (see also Padmasambha- 

va), 254-55 
Ripumalla, 1 1 
Rising Nepal, 178 
river systems 

Bhutan: 271 

Nepal: 62-65 
Rizal, Teknath, 327 
roads 

Bhutan: 306-8; construction of, 264, 
306-7, 336; under development 
plans, 290 
Nepal: 42, 107, 133-35, 212; con- 
struction of, 109, 133, 186; foreign 
aid for, 119, 120, 188; under 
Second Five- Year Plan, 109 
Rolls of Succession: established, 30; modi- 
fied, 33 
ropeways, 136 
Rose, Leo E., 74, 75 
Royal Advisory Council, xxi, 318, 319; 

Buddhist representation in, 282 
Royal Body Guards, 337, 338 
Royal Bhutan Airlines, 136, 308, 312 
Royal Bhutan Army, xxiii, 264, 336-38; 
arms supplies, 335, 337; civil defense 
by, 325-26, 339; conscription, 336; 
Druk Gyalpo as supreme commander, 
336; established, 336; militia, 339; mis- 
sion of, xxiii, 336; organization of, 
336-37; personnel, xxiii, 336; recruit- 
ment for, 338; reorganization, 336; 
retirement, 338; self-sufficiency in, 338; 
training of, 335, 337, 339 
Royal Bhutan Police, xxiii, 340 
Royal Bhutan Polytechnic, 287 
Royal Civil Service Commission, 321, 
323 

Royal Dutch Shell, 133 

Royal Guards Brigade, 215 

Royal Insurance Corporation of Bhutan, 



295, 307 
Royal Manas National Park, 302 
Royal Nepal Airlines, 136, 216 
Royal Nepal Army: aid-to-the-civil- 
power, 213, 220; benefits, 219; brigades 
in, 214, 215; capabilities, 214-16; 
casualties in, 202; conditions in, 201-2, 
205; under constitution, 205-8; cooper- 
ation of, with Indian Army, 233-34; 
defense plan, 211-12; dispositions, 
214-16, 217; equipment, 197, 215; eth- 
nic groups in, 216; headquarters staff, 
209; health conditions in, 219, 232; his- 
tory of, 197; insignia of, 221; king as 
commander of, 148, 155, 198, 205-6, 
208; languages in, 217; missions of, 
197-98, 211-15; modernization of, 
201, 233; and monarchy, xvi, xviii, 82; 
morale, 219; and national defense, 
211-12; and Nepali Congress Party, 
205; officer training, 220-21; organiza- 
tion of, 197, 206, 208-9, 214; pay 
scales, 218-19; promotions in, 201; 
rank structure of, 221-23; recruitment, 
199-200, 202, 216-19; religious ele- 
ment in, 218; reserves, 217; resource 
constraints on, 209, 215; resupply oper- 
ations, 231-32; role of, in national secu- 
rity, 207; role of, in prodemocracy 
movement, 213, 214, 239; role of, in 
society, 198-200, 239; role of, in World 
War I, 34-36; schools, 220; senior 
officer corps, 221; term of enlistment, 
218; training, 197, 219-21; women in, 
218 

Royal Nepal Army Air Service, 215-16 
Royal Nepal Military Academy, 221 
Royal Secretariat, 319; officials of, 321 
rural areas 

Bhutan: development in, 292, 334 
Nepal: 83-84; development in, 112; 
education in, 98; electricity for, 
132; elite class in, 163; family 
planning in, 73; foreign aid to, 
188; health care in, 101-2; 
housing in, 112; literacy rates in, 
97; political alignments in, 50; 
population statistics for, 67, 83; 
poverty in, 84; women in, 86 

SAARC. See South Asian Association for 
Regional Cooperation 



417 



Nepal and Bhutan: Country Studies 



Sagarmatha. See Mount Everest 
Sakya clan, 5 
Samaya, 178 
Samdrup Jongkhar, 270 
Samichhya, 178 
Samudragupta, 6 
Samyuktha Mukti Bahini, 237 
Samyukti Parjatantra Party. See United 
Democratic Party Sanskritization, 80 
Sapkota, Devi Prasad, 36 
Sapt Kosi. See Kosi River 
Sarki caste, 83-84 

Saudi Arabia: financial aid from, 132, 

133; loans from, 119 
Save the Children Federation, 188 
School Leaving Certificate examination, 

96, 97 
schools 

Bhutan: 262, 284-87 
Nepal: 34, 92-94, 96-98; enrollment 
levels, xix, xxiii, 94, 96; Nepa- 
li-language, 33; palace, 32 
Second Buddha. See Padmasambhava; 

Rimpoche 
Senate, 148 

Sepoy Rebellion, 260; Gurkha soldiers in, 

200-201; support for, 31-32 
service sector: employment in, 66 
SETAMAGURALI, 170 
Seti River, 65 

Seventh Day Adventists, 188 
shabdrung system, 341; ended, 262; estab- 
lished, 256; succession under, 257-58 
Shah, Bahadur, 19, 257 
Shah, Dravya (king), xv, 15 199 
Shah, Girvan Yuddha, 19 
Shah, Nar Bhupal, 17 
Shah, Pratap Singh (king), 18 
Shah, Prithvi Bir Bikram (king), 32 
Shah, Prithvi Narayan, 17, 22, 180; ac- 
tivities of, 17, 33, 199; accession of, 18 
Shah, Rajendra Bikram (king), 25; exile 

of, 28 
Shah, Ram, 15 

Shah, Rana Bahadur (king), 18 
Shah, Surendra Bikram (king), 26, 28, 32 
Shah, Tribhuvan Bir Bikram, 39 
Shah, Trilokya Bir Bikram, 31 
Shah Dev, Birendra Bir Bikram (king): 
accession of, 47; constitutional amend- 
ments by, 150; military under, 197; 
modernization under, 48; Parliament 
suspended by, xxvi; political parties 



legalized by, 165; visit to United States 
by, 188; zone of peace declared by, 179 

Shah Dev, Dipendra Bir Bikram (crown 
prince), 221 

Shah Dev, Mahendra Bir Bikram (king): 
xvi, 4, 43, 47, 148; bureaucracy ex- 
panded by, 88; development under, 47; 
government dissolved by, 44, 145; and 
B.P. Koirala, 43-44; land reform un- 
der, 47; military under, 197; nonalign- 
ment under, 180; palace coup by, 44, 
145; panchayat system under, 44-48; re- 
form under, 81-82; role of, 46; visit to 
China by, 236 

Shah Dynasty, xvi, 20; end of, 25; estab- 
lished, 199; and Gurkhas, 197, 199; 
marriages of, with Ranas, 30 

Shamsher, Bhim, 34 

Shamsher, Bir, 32; as prime minister, 32 

Shamsher, Dev, 33 

Shamsher, Juddha, 33, 38 

Shamsher, Mohan, 38, 39 

Shamsher, Subarna, 46, 47 

Shamsher Rana, Chandra, 33, 36; mili- 
tary under, 201; police under, 226; Tri- 
Chandra College established by, 92 

Shamsher Rana, Padma: reforms by, 38, 
147; resignation of, 147 

Shams ud-din Ilyas (sultan), 11 

Sharchopkha language, 276; broadcasts 
in, 312, 328 

Sharchop people, xxii, 273-74 

Shekhar, Chandra, 165 

Sherpa, Tensing, 138 

Sherpa people, 76, 79 

Sherubtse College, 287 

Shigatse, 20 

Shiva, 91 

Shreshtha, Dr. B.P., 140 

Shrestha, Marich Man Singh, 50, 173 

Siddhartha Gautama {see also Buddha), 5, 
190; background of, 91-92 

Siddhartha Highway, 135 

Siddhartha Nagar, 69 

Sikh people, 21 

Sikh War, Second, 189 

Sikkim, 266; in Anglo- Nepalese War, 22; 
Bhutan's invasion of, 258, 260; Bhu- 
tan's relations with, 266; China's claim 
to, 332; Nepal's invasion of, 20 

Sindhuli-Bargachi Highway, 135 

Singapore: Bhutanese police trained in, 
340; Gurkha soldiers in, xviii, 198, 



418 



Index 



224-25; trade with Bhutan, 297 
Singh, Abhiman, 26, 27 
Singh, Gagan, 26 
Singh, Ganeshman, 48 
Singh, Ranjit, 21 

Singh, Ranoddip: military under, 201; as 

prime minister, 32 
Singh, Thakur Chandan, 36 
Sino-Indian border war (1962), 44, 186, 

234, 332-33 
Sino-Nepal Boundary Treaty (1961), 186 
Sino-Nepalese Treaty (1792), 185, 236 
Sino-Nepal Joint Commission, 186 
Sivasimhamalla, 13 
Siwalik Hills, 269 
Siwalik Range, 59, 50 
Socialist Liberation Army. See Samyuk- 

tha Mukti Bahini 
social services, xix, 109, 110, 113 
Solarz, Stephen, 188-89 
Somes varadeva, 9-10 
South Asian Association for Regional 

Cooperation (SAARC) 
Bhutan: xxvi, 329, 334 
Nepal: xx, xxiv, xxvi, 50, 146, 179, 
234 

Secretariat: 192, 329 
Southern Hills. See Siwalik Hills 
Soviet Union: aid to Nepal from, 119, 
126, 133, 146, 189; relations with 
Nepal, 43, 189-90, 220; support of, for 
zone of peace initiative, 190 
Sri Lanka: Nepal's relations with, 184 
Srongtsen Gampo (king), 254 
standard of living 
Bhutan: 289 
Nepal: 112 
State Bank of India, 294 
State Council, 257 
Statesman, 178 

State Trading Corporation of Bhutan, 
295 

State Treasury, 33 

strikes: general, xvii, 165; military's role 

in, 213-14; student, 47 
Structural Adjustment Program, 112, 

118-19 

student demonstrations, 47, 51, 162, 172 
stupas 

Bhutan: 282, 283 

Nepal: 5, 9 
Sudra caste, 80 
suffrage, 43, 157 



Sun River, 65 

Sunwar people, 90 

Supreme Court, 148, 158, 159 

Supreme Court Act (1952), 230 

Supreme Court of Appeal, xxi, 321 

Surkhet Valley, 60 

suttee, 34 

Svayambhunath, 9 

Switzerland: aid to Bhutan by, 296; aid 
to Nepal by, 119, 133, 190 

Taiping Rebellion, 31 
Taleju. See Manesvari 
Tamang language, 81 
Tamang people, 76, 81; as Gurkha sol- 
diers, 200 
Tama River, 65 
Tamur River, 65 

Tanakpur project: controversy over, xx, 

xxvi; rejection of, xxv 
Tarai people, 5 
Tarai Plain, 57 

Tarai Region, 5, 57; agriculture in, 123; 
ceded to Britain, 23; climate of, 60, 61; 
elite class in, 163; etymology, 60; Indo- 
Nepalese in, 75; migration to, 47, 122; 
military recruitment in, 216; percent- 
age of population living in, 66, 69; 
population growth in, 66, 70; returned 
by Britain, 23, 322; rivers in, 65; 
underemployment in, 122; unemploy- 
ment in, 122 
Tarun Gorkha (Young Gorkha), 36 
Tashichhodzong, 266, 314, 315, 318 
Tashi Commercial Corporation, 303 
tax collectors, 23 
taxes 

Bhutan: 257 
Nepal: 113-14 
teachers 

Bhutan: 286 
Nepal: xviii, 96 
Tej Narasimha (king), 18 
telegraph, 312 
telephones 

Bhutan: 311 
Nepal: 42, 109, 138 
television 

Bhutan: 312 
Nepal: 138, 179-80 
telex, 311 

Tenjur (Collection of Commentaries), 282 
Thakali people, 90 



419 



Nepal and Bhutan: Country Studies 



Thakuri people, 79; as Gurkha soldiers, 
199, 200 

Thapa, Amar Singh, 21, 200 

Thapa, Bhimsen, 19, 25; military reor- 
ganized by, 199-200; suicide of, 25 

Thapa, Mathbar Singh, 25, 26 

Thapa, Ranbir Singh, 25 

Thapa, Surya Bahadur: fall of, 50, 162; 
as prime minister, 49 

Thapa family, 20; in Kot Massacre, 27 

Tharu language, 81 

Tharu people, 74, 77, 81 

Thimphu, 257, 314, 318; as municipal 
corporation, 323; population of, 273; 
temperatures in, 270; as year-round 
capital, 265 

Thimphu General Hospital, 289; Health 
School, 288 

Thimphu Valley, 271 

Three Kingdoms period, 12-15; culture 
of, 13; Gorkha conquest of, 18; rela- 
tions of, with China, 14 

Tibet, 7, 14, 107, 256, 266; China's in- 
vasion of, 185, 233, 262, 332; Gorkha 
invasions of, 20, 199; influences of, on 
Bhutan-Indian relations, 330; migra- 
tion from, 59; Nepalese expelled from, 
21; Nepal's invasion of, 185, 236; refu- 
gees from, 275; trade with Bhutan, 297, 
298; trade with Nepal, 31 ; tribute paid 
by Bhutan to, 328; tribute paid to 
Nepal, 236; wars and disputes with 
Nepal, 3, 20 

Tibetan-Mongol military forces, 255; in- 
vasion of Bhutan by, 256-57 

Tibetan Plateau, 57; rainfall in, 61 

Tibet-Bhutan relations, xxiv, 332 

Tibet-Nepal relations, 31; boundary is- 
sues, 186; historical, 185 

Tibeto- Nepalese people, xix, 74, 79; and 
caste system, 80-81; occupations of, 79; 
religions of, 90; women's status among, 
86 

Tihar (Dipawali) festival, 62 

Timber Corporation of Nepal, 125 

Time, 178 

Times of India, 178 

Tirhut, 9 

Torsa Chhu, 271 

tourism 

Bhutan: xxiii, 312-13 

Nepal: xxiii, 138-39; earnings from, 
119, 138, 139; effect of trade and 



transit dispute on, 182; under 
Second Five- Year Plan, 109 

trade 

Bhutan: 297-98; encouragement of, 
262 

Nepal: 59, 116-19, 257; deficit, 116, 
118; with India, 116; in Licchavi 
Dynasty, 9; migration for, 70; 
taxes on, 113; with Tibet, 31 
trade and transit dispute with India, 
50-51, 107, 116, 164, 191, 198; agree- 
ments in, 181; causes of, 182, 235; ef- 
fect of, on economy, xvi, xx, 51, 116, 
119, 125, 126-27, 133, 139, 182, 
235-36; resolution of, 183 
trade and transit issues, 334 
Trade and Transit Treaty with India 
(1960), 43, 115, 223; negotiations for, 
176 

Trade Information Centre, 305 
transportation 

Bhutan: 306-8, 334 
Nepal: 112, 133-37; under five-year 
plans, 109, 110, 133; foreign aid 
for, 119, 189; of freight, 107 
Transport Corporation of Bhutan, 307-8 
Treason Act, 177 

Treaty of Friendship Between the Gov- 
ernment of India and the Government 
of Bhutan (1949), xxiv, 263, 330, 335 

Treaty of Peace (1774) between Britain 
and Bhutan, 259 

Treaty of Peace and Friendship (1960) be- 
tween China and Nepal, 43 

Treaty of Peace and Friendship (1950) be- 
tween India and Nepal, xx, 180, 181 

Treaty of Peace and Friendship (1960) be- 
tween Tibet and Nepal, 186 

Treaty of Perpetual Peace and Friendship 
(1923) between Britain and Nepal, 36, 
189, 202 

Treaty of Punakha (1910), 262 

Treaty of Sagauli (1816), xv, 22, 32, 180, 
189, 200 

Treaty of Sinchula (1865), 260 

Treaty of Thapathali (1956), 186, 236 

Treaty of Trade and Commerce (1950) be- 
tween India and Nepal, xx, 180 

Tribhuvan International Airport, 119, 
136, 232 

Tribhu van-Raj path Highway, 135 
Tribhuvan University, 47, 96-97 
Tri-Chandra College, 34, 92 



420 



Index 



Tripurasundari (queen), 19, 25 

Trisuli River, 65, 132 

Triton Energy, 133 

Tsangla language, 276 

Tsa Yig, 257, 341 

Tsering, Dawa, xxvii, xxviii 

Tshogdu. See National Assembly 

Tuberculosis Control Project, 100 



underemployment, 56, 122 

unemployment 
Bhutan: 280 
Nepal: 56, 122 

United Arab Emirates, 190 

United Democratic Party, 171; alliances 
of, with other parties, 44 

United Left Front parties, 165, 169, 213 

United Liberation Torch Bearers, 237 

United Mission to Nepal, 188 

United Nations, 311; aid to Bhutan by, 
295, 296; aid to Nepal by, xxiii, 119; 
Bhutan's membership in, 265, 329, 
331; Koirala's address to, 43; Nepal's 
membership in, xx, xxiv, 179, 191, 
234; peacekeeping forces, xviii, 214, 
223; volunteer programs, 296 

United Nations Development Pro- 
gramme, xxvi, 114, 286, 287, 302, 321 

United Nations Educational, Scientific, 
and Cultural Organization, 96, 286 

United Nations Food and Agriculture Or- 
ganization, 191, 287 

United Nations High Commissioner for 
Refugees (UNHCR), xxiv, xxv, xxvi 

United Nations Industrial Development 
Organization, xxvi 

United States: aid to Nepal from, xx, 114, 
119, 120, 121, 133, 146, 188; arms sup- 
plies to Nepal from, 215; Bhutanese 
students in, 287; exports to Nepal by, 
116; imports from, to Nepal, 118; King 
Birendra's state visit to, 188; military 
training of Nepalese in, 221; reaction 
of, to prodemocracy movement, 146, 
188; relations with Bhutan, 329-30; 
technical assistance to Nepal from, 133; 
tourists to Bhutan from, 313; trade with 
Bhutan, 297 

United States Agency for International 
Development, 121, 188 

United States-Nepal relations, 43, 



187-89, 220 
Unit Trust of Bhutan, 295 
Universal Postal Union, 191, 311, 334 
University of London, 286 
Upper House, 43 

urban areas, 8, 273; education in, 98; 
farming in, 83; health care in, 101-2; 
housing in, 112; literacy rates in, 97; 
population statistics for, 67, 68, 273; 
women in, 86 
urbanization 

Bhutan: 273 
Nepal: 67-68 



Vaisya caste, 80 
Vedas, 90 
villages 

Bhutan: 323 

Nepal: 83; projects in, 84 
Vishnu, 91 

Voice of America, 179 
voting 

Bhutan: 318 

Nepal: procedures for, 173; rights, xv 
Vriji people, 9 



Wang Chhu, 271, 304 
Wangchuck, Dechen Wangmo (princess), 
314 

Wangchuck, Jigme (king), 314; centrali- 
zation under, 263 

Wangchuck, Jigme Dorji (king), 314; as- 
sassination attempt on, 265; death of, 
265; modernization under, 263-66; 
power struggle under, 264-65 

Wangchuck, Jigme Gesar Namgyal 
(crown prince), 314 

Wangchuck, Jigme Singye (king), xxi- 
xxii; background of, 265-66; corona- 
tion of, 266, 314; lifestyle of, 314; 
marriage of, 314; political participation 
under, xxii; queens of, 314; travel by, 
315, 334 

Wangchuck, Namgyal (prince), 264, 214, 
321 

Wangchuck, Sonam Chhoden (princess), 
280, 314, 321 

Wangchuck, Ugyen (king): accomplish- 
ments of, 313-14; ascendancy of, 261; 



421 



Nepal and Bhutan: Country Studies 



as Druk Gyalpo, 262; knighted, 261; 
reforms under, 262 
Wangchuck Dynasty, xxi, 253; security 
of, 314 

Wangchuck Lo Dzong Military Training 

School, 337 
West Bengal, 266 

West Germany. See Federal Republic of 
Germany 

Western popular culture, 82; influence of, 
55 

wheat, 62, 124, 298; imported to Bhutan, 

299 
wildlife, 270 
women 

Bhutan: xxiii; in development, 292; 
education of, 280; employment of, 
280; in military, 336; in politics, 
318; role of, 280, 292 

Nepal: education of, 97; employment 
of, 86; equal rights for, xix, 153; 
living conditions of, 86; in mili- 
tary, 218; in politics, 173, 174; 
prisons for, 228; role of, xix, 86- 
87, 218; status of, 86-87 
Women's Democratic Party, 171 
work force 

Bhutan: 289, 303, 306, 322 

Nepal: 127 



World Bank: aid to Bhutan by, 296, 302; 
aid to Nepal by, 32, 133; Bhutan's debt 
to, 297; Bhutan's membership in, 334; 
Nepal's debt to, 119, 120; Nepal's 
membership in, 191; reaction of, to 
prodemocracy movement, 146 
World Fellowship of Buddhists, 190 
World Food Programme, xxvi 
World Health Organization, 288, 289 
World Hindu Meet, 190 
World War I: Gurkha service in, 189, 
202; role of Royal Nepal Army in, 
34-36 

World War II: casualties in, 203; Gur- 
kha service in, 189, 203 
World Wildlife Fund, 302 

Yakshamalla (king), 12 
Yala, 8 

Yambu. See Koligrama 
Yanchenphug High School, 287 
Yangala. See Dakshinakoligrama 
Yangki, 264, 328 
yeti, 57 

zone of peace, Nepal as, 152; announce- 
ments of, 179, 181, 234; rejection of, 
182; support for, 50, 187, 188, 189, 
190 



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